Disclaimer: I used Claude Opus to help write this post since English is not my native language. The notes from the interview are mine, the structure/grammar got cleaned up.
Just watched Cohen on Making Money with Charles Payne. Don't see any posts on this yet so sharing the key detail that stood out.
The structure Cohen mentioned:
- $20B committed letter from TD Securities
- $9B cash from GameStop's balance sheet
- 50% cash, 50% stock
- Combined entity equity split: ~60% to eBay shareholders, ~40% to GameStop shareholders
- Cohen quote: "people don't understand how to do a transaction like this"
Why the 60/40 is interesting:
This isn't the language of a straight acquisition. A pure "GameStop acquires eBay" deal wouldn't typically be described as a 60/40 split between the two shareholder bases. The 60/40 framing suggests a combined entity structure where both shareholder groups end up holding equity in the same resulting company.
Cohen didn't specify whether this means a holding company structure, reverse merger, or something else. He just used the 60/40 language and said "people don't understand how to do a transaction like this."
For the maths -> eBay current market cap: ~$48B GME current market cap: ~$10B Current ratio: roughly 82/18 in favor of eBay
For GME shareholders to end up with 40% of the combined entity (instead of 18%), the structure has to account for the cash portion of the consideration separately from the equity portion. The 60/40 likely refers to the equity split AFTER the cash payment to eBay shareholders, not including the cash.
He has another interview on TBPN at 12:30 PM PT today, might get more clarity there.
Not financial advice.
EDIT: A commenter made a fair point on the math. With GME at current price and a $125/share offer, the actual split would be closer to 30/70 than 40/60. For the 40/60 Cohen stated to work mathematically, we'd need either GME stock higher at the time of issuance, a lower final offer price, or specific structure details not disclosed on air. Cohen's quote was about the equity split mechanics, not a commitment to specific final terms. Final numbers will be in the proxy filing if/when this advances.