GameStop considering partnership with eBay rather than takeover - report

(Sharecast News) - GameStop is reportedly considering withdrawing its $56bn bid for eBay in favour of a partnership. According to Bloomberg, citing people familiar with the matter, chief executive Ryan Cohen is considering proposing a partnership or joint venture that would enable eBay to leverage GameStop's roughly 1,600 US retail locations.

Sources told Bloomberg that such a move could allow both to increase market share in high-margin categories such as trading cards and collectibles. It was understood that GameStop, as one of eBay's largest shareholders, would seek representation on eBay's board as part of any partnership.

GameStop hasn't made a final decision and Cohen could still weigh other options, sources said.

Danni Hewson, head of financial analysis at AJ Bell, said: "GameStop's pursuit of eBay always seemed overly optimistic at best. A minnow compared with its intended target, most investors were left scratching their heads at the plans.

"GameStop's shares have weakened since the news first broke back in May. But get past the scepticism and you can see the potential benefits of a tie-up between the two businesses - a collaboration as opposed to a wonky takeover which could mesh GameStop's bricks and mortar stores with eBay's niche collectables market.

"The likes of Vinted and Depop have seen eBay lose ground in recent years, but it has an instantly recognisable brand that could benefit from new strategic pathways. Some kind of partnership would likely be considerably more attractive than a takeover fuelled by debt."