Dive Brief:
- GameStop has approved CEO Ryan Cohen's request to drop a performance pay package for the chief executive reportedly valued at around $35 billion. Cohen said he wants the company “fully focused on GameStop's operating performance and its proposed eBay acquisition,” according to a Tuesday press release.
- GameStop will release additional details about its proposed acquisition of eBay this week, per the release.
- The move comes about a week after a class action lawsuit was filed by a stockholder seeking to enjoin the vote at the annual meeting in July on a proposal to add 1.5 billion authorized shares. The complaint alleges the proposal was enacted after the board realized “that the charter amendment needed to make the pay package effective will not receive the requisite support,” per a company filing outlining the complaint on Tuesday.
Dive Insight:
GameStop is moving full steam ahead on its effort to acquire eBay, despite the online marketplace rejecting GameStop’s previous proposal and deeming it “neither credible nor attractive.”
“I’m definitely not going to give up,” Cohen told Piers Morgan in an interview on Friday regarding the eBay move. “We're one of the largest active shareholders of the business, and I love eBay and the business is highly complementary to GameStop’s business, and it’s a business that I personally understand very well and is within my circle of competence.”
GameStop in May submitted a nonbinding acquisition proposal for eBay worth about $56 billion, consisting of half cash and half stock.
EBay’s first quarter revenue grew 19% year over year to $3.1 billion, while its net income increased 2% to $512 million. The online marketplace has recently embarked on a major acquisition of its own, agreeing in February to buy the apparel resale platform Depop for about $1.2 billion.
GameStop reached its highest-ever quarterly net income in Q1 at nearly $390 million. That marked a 770% year-over-year increase for the gaming retailer, with net sales for the quarter up 14% to $835.3 million.
