GameStop (GME) plans to acquire online marketplace eBay (EBAY) for $55.5 billion in a major expansion, raising new questions about the existence of its Bitcoin. A stake could help fund the deal.
The video game retailer, which holds about $368 million worth of Bitcoin, submitted a non-binding offer on Sunday to acquire eBay for $125 per share in cash and stock. The bid represents a 46% premium to eBay’s stock price when GameStop began taking positions in early February. The company said it currently holds 5% of the economy through equities and derivatives.
A deal of this size can require a lot of cash. GameStop said it expects to fund the acquisition using $9.4 billion of “cash and liquid investments” on its balance sheet and up to $20 billion in financing backed by a letter from TD Securities.
Will GameStop sell BTC?
This raises new questions: whether GameStop will sell its BTC to help pay for trading fees.
The acquisition plan follows earlier remarks from CEO Ryan Cohen, who said in February that he was making a “very, very, very big” acquisition of a publicly traded consumer company. He described the plan as “more attractive than Bitcoin” and left open the option of selling the company’s cryptocurrency assets to fund the deal.
GameStop revealed last month that it had moved approximately 4,709 BTC to cryptocurrency exchange Coinbase’s prime brokerage platform for institutions, Coinbase Prime, as part of a covered call strategy to maintain Bitcoin exposure while generating revenue.
Following the Coinbase Prime action, the company held just over $9 billion in cash and considered its $368 million in Bitcoin reserves to be “accounts receivable.” Combined, these items could be used to provide $9.4 billion in balance sheet authority for the acquisition.
Cohen also said in an interview with CNBC that the company “has the ability to issue stock to complete the deal.”
As of press time, GameStop had not responded to a request for comment on its plans to hold Bitcoin.
The proposed eBay deal would turn GameStop into a broader e-commerce company. It will also determine whether the company’s Bitcoin remains a long-term holding or becomes a source of funding for expansion.
