GameStop ( GME ) is aiming for a major expansion with a proposed $55.5 billion purchase of online marketplace eBay ( EBAY ), raising new questions about whether its bitcoin holding could help finance the deal.
The video game retailer, which has about $368 million in BTC, on Sunday made a non-binding offer to buy eBay for $125 per share in cash and stock. The bid represents a 46% premium to eBay’s stock price in early February, when GameStop began building a position. The company said it now has an economic stake of 5% through equities and derivatives.
A trade of this size is likely to require significant cash. GameStop said it expects to fund the offering by using its $9.4 billion of “cash and liquid investments” on the balance sheet and up to $20 billion in financing, backed by a letter from TD Securities.
Will GameStop Sell BTC?
That raises new questions about whether GameStop will sell its BTC to help pay for the deal.
The acquisition plan follows earlier remarks by CEO Ryan Cohen, who said in February that he was pursuing a “very, very, very large” acquisition of a public consumer company. He described the plan as “much more compelling than bitcoin” and left open the possibility of selling the company’s crypto holdings to finance a deal.
GameStop revealed last month that it moved about 4,709 BTC to Coinbase Prime, crypto exchange Coinbase’s prime brokerage platform for institutions, as part of a covered call option strategy that maintains exposure to bitcoin while generating income.
The company had just over $9 billion in cash and accounted for its $368 million bitcoin holdings as “receivables” after the Coinbase Prime maneuver. These items add up to $9.4 billion in balance sheet power that could be used to finance the acquisition.
In an interview with CNBC, Cohen also said the firm has “the ability to issue shares to get the deal done.”
GameStop did not respond to a request for comment on its plans for its bitcoin holdings by press time.
The proposed eBay deal would make GameStop a broader e-commerce player. It will also determine whether the company’s bitcoin remains a long-term holding or becomes a source of funding for the expansion.
