GameStop makes $55M bid to take over iconic website to transform it into an Amazon rival
GameStop could be on the verge of a significant transformation, as the once-struggling games retailer has put in a sizeable bid for an iconic website, vowing to make it a rival for Amazon in the near future.
Almost every brick and mortar store has suffered as a result of the mass migration to online shopping, as while recent scares have shown the risks of an all-digital future, convenience remains understandably king for many customers.
While countless companies have unfortunately gone out of business in the last decade, one retail giant that has flirted with administration is GameStop – to the point where it's struggles were at the heart of an industry-shaking stock market movement several years ago.
It appears to have made a resurgence in recent times, however, which is likely in part due to the increased popularity of things like Pokémon trading cards which are now going for millions on the second-hand market.
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Many have credited the work of CEO Ryan Cohen for this transformation, and this new-found success has empowered the company to seek out a potentially major takeover, bidding on one of the interests most well-known websites.
As reported by the BBC, GameStop has now made a surprise bid to purchase eBay, with the gaming store sending over an offer worth $55.5 billion in total — roughly $20 more per-share compared to the e-commerce giant's closing price last Friday.
Cohen has claimed that eBay could, under his leadership, become far more successful than it currently is — to the point where it could even rival Amazon at some point in the future, which some might not have considered as a possibility.
Industry experts have cast doubt on the possibility of the deal going through, however, with Bernstein noting that it would be "surprised if anything became of it" due to GameStop's comparatively small balance sheet.
eBay is currently worth around four times more than GameStop making the acquisition plans rather unexpected, yet a falling user base and dwindling sales could make it prime for a takeover and reinvention.
Cohen has claimed that eBay is a "marketplace with near-universal brand recognition," but has failed to capitalize on this — leaving space for rival second-hand websites to claim ground, especially when it comes to specialized product groups.
One thing that could jeopardize the deal though is the fact that eBay would subsequently become saddled with GameStop's debt, and the stock markets responded with a 9 per cent drop for the latter on Monday in response to the attempted takeover.