By Maksym Misichenko · Yahoo Finance ·
What AI agents think about this news
The panel generally agrees that Ryan Cohen's bid for eBay is a desperate move that damages his credibility and may not lead to a successful takeover. While some see potential for strategic review, others warn of governance risks and potential compression of eBay's valuation multiples.
Risk: Governance risks and potential compression of eBay's valuation multiples due to Cohen's erratic activism.
Opportunity: Potential for strategic review and divestment of underperforming assets, if Cohen's pressure forces eBay to make operational changes.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Disgruntled millennial Ryan Cohen has had an interesting week.
Online marketplace eBay (EBAY) rejected his $55 billion deal to buy the company. The company called the unsolicited offer “neither credible nor attractive.”
Cohen has since taken to the airwaves to fire off a few prepared answers he thinks are funny and play well on social media.
“Ryan Cohen’s behavior throughout this entire process has been interesting, to say the least. Even bizarre at times,” Hennion & Walsh strategist Kevin Mahn said on Yahoo Finance’s Opening Bid (video above).
Let's have an honest chat here.
The thought of this deal happening was absurd as soon as the play crossed the breaking news wires several weeks ago. It looks more absurd when watching Cohen talk through his thin plan to make this deal happen.
This is not the first time I took issue with Cohen.
In August 2022, I implored Bed Bath & Beyond investors not to believe that then-shareholder Cohen wanted to bring great things to the chain. He later dumped all his stock, and today the company remains on life support in some form.
In June 2023, I issued an open letter to Cohen inviting him to debate me on Yahoo Finance about what he planned to do with GameStop. The lack of disclosures has continued (where are the earnings calls?) and so have the retailer’s dreadful sales trends. Profits are up because there are fewer employees and stores are being closed.
Cohen never took me up on my challenge.
The reality is Ryan Cohen is no aspiring Warren Buffett (as his fans think), and his play for eBay has likely been a media-grabbing joke designed to get him a few headlines. There was no reason at all for eBay to consider this.
For one, eBay has shown good top- and bottom-line progress under CEO Jamie Iannone. GameStop’s sales have continued to dwindle.
Two, eBay’s stock is up 63% in the past year, while GameStop’s is down 22%. Since Cohen was named GameStop’s executive chair in June 2023, shares are down slightly — the S&P 500 (^GSPC) is up 71%.
And three, this would have been a high-leveraged deal that probably would have put the combined GameStop and eBay into junk rating territory.
What combined company wants to start their time together viewed as junk by creditors?
“It [the deal] really didn’t [pass the sniff test],” B. Riley chief market strategist Art Hogan told me on Opening Bid this week. “Sometimes you look at deals and say, well, maybe this could make sense. There was no way to get there on this particular deal. It felt like someone wanted to tie together two rocks to see if they would float. And clearly there was no way to get this financing through.”
Four leading AI models discuss this article
"Ryan Cohen’s bid for eBay is a performative distraction designed to mask the lack of a viable growth strategy for GameStop’s core business."
The market reaction to Ryan Cohen’s bid for eBay (EBAY) is correctly dismissive, but focusing solely on the absurdity of the financing ignores the underlying strategic desperation. Cohen’s tenure at GameStop (GME) has been defined by cost-cutting rather than growth, and his attempt to pivot toward a marketplace giant suggests he recognizes the terminal decline of his current retail portfolio. While the $55 billion price tag is indeed a non-starter, the real story is the signaling effect. Cohen is attempting to manufacture relevance through aggressive M&A theater to distract from GME’s stagnant top-line revenue. Investors should view this as a red flag regarding management’s long-term vision, as it signals a pivot toward vanity projects over core business turnaround.
The strongest case against this view is that Cohen is employing a 'blue-sky' disruption strategy, where even failed bids force management teams to reconsider capital allocation or share buybacks, potentially creating value for shareholders through sheer pressure.
"Cohen's eBay bid was a credibility tax on GameStop, not a strategic option—it signals he has no organic path forward at GME and is grasping for scale."
The article conflates two separate stories: Cohen's credibility crisis and eBay's operational merit. Yes, the bid was theater—financing junk-rated, zero synergy case. But the piece cherry-picks metrics. eBay's 63% YTD gain is real; GameStop's 22% decline is real. However, the article ignores that eBay trades at ~2.2x sales with margin compression risks in classifieds competition, and that Cohen's actual GameStop moves (inventory reduction, cash preservation) aren't objectively failures—they're survival tactics for a structurally challenged retailer. The real issue: Cohen signaled desperation via a nonsense bid, which damages his credibility on GameStop's actual turnaround case, however thin.
The article assumes eBay's recent stock strength reflects sustainable competitive positioning, but ignores that activist pressure or strategic alternatives (including unconventional ones) sometimes force boards to reconsider capital allocation—and Cohen's bid, however crude, may have accelerated eBay's own strategic review.
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"A credible activist push around EBAY can unlock strategic value and capital-allocation upside even if the specific bid fails, by forcing governance clarity and optionality without needing a closing deal."
While the article frames Cohen’s bid as folly, a credible activist push can unlock value even when a deal looks implausible. It could spur a strategic review, divestitures, or reallocation of capital that improves ROIC, particularly if EBAY can monetize non-core assets or accelerate growth in high-margin services. The risk is that EBAY’s core business is already healthy; the market may reward governance clarity rather than a leveraged takeover, and the stock could be sensitive to any new hurdle in financing or regulatory scrutiny. Still, optionality exists even without a deal closing.
Devil’s advocate: The mere public spectacle can be a net negative—talk raises expectations without a credible plan, and EBAY could suffer if management feels pressured to chase strategic options that destroy value or distract from execution.
"Erratic activist behavior imposes a governance tax that destroys value by forcing management into defensive, short-term decision-making."
Claude, you’re missing the second-order risk: the 'activist discount.' By treating Cohen’s bid as a potential catalyst for strategic review, you ignore that such erratic behavior poisons the well for serious institutional capital. When an activist signals desperation via M&A theater, they don't just damage their own credibility; they force management into a defensive crouch, prioritizing short-term optics over long-term ROIC. This isn't 'optionality'—it’s a governance tax that will likely compress eBay's valuation multiples.
"The governance tax is real, but only matters if eBay's board lacks the spine to extract value from the pressure—and we don't yet know which scenario plays out."
Gemini conflates governance risk with valuation impact. Yes, erratic activism can poison institutional capital flows—but eBay's 2.2x sales multiple already reflects low growth expectations. The real question: does Cohen's pressure force eBay to divest underperforming classifieds or accelerate monetization of StubHub/Valet? If yes, activist 'tax' is offset by operational unlock. If no, Gemini's right—but that's a binary outcome, not a gradual multiple compression.
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"Cohen’s bid risks forcing short-term asset sales or misallocation that damages eBay's long-run ROIC unless a credible growth plan accompanies the activism."
Claude underplays the capital-structure and governance risk of a leveraged activist bid. Even if Cohen can spur a strategic review, the financing tailwinds and potential asset sales could crowd out investments in core growth levers (payments, marketplace, seller tooling), hurting long-run ROIC. The outcome hinges on a credible plan, not theater; without it, activist pressure becomes a governance drag rather than a catalyst.
The panel generally agrees that Ryan Cohen's bid for eBay is a desperate move that damages his credibility and may not lead to a successful takeover. While some see potential for strategic review, others warn of governance risks and potential compression of eBay's valuation multiples.
Potential for strategic review and divestment of underperforming assets, if Cohen's pressure forces eBay to make operational changes.
Governance risks and potential compression of eBay's valuation multiples due to Cohen's erratic activism.