Stifel sees strategic fit, doubts GameStop-eBay deal will actually happen

Commenting on GameStop (GME) bid to acquired eBay (EBAY), Stifel says that from GameStop’s perspective this makes strategic sense as the company has been looking to pivot to more of an e-commerce paired with physical bricks and mortar strategy that is focused on the collectibles marketplace, which is a particular area of strength for eBay. With that said, Stifel is “a bit skeptical” that this deal gets done for a handful of reasons. First, the firm imagines shareholders might not be as enticed to support the deal given the level of GameStop stock that will be needed to get the deal done. Second, Stifel sees a considerable amount of integration risk as GameStop is significantly smaller than eBay. Lastly, the integration risk makes the $2B in proposed synergies seem like a lofty goal, particularly within 12-months. The firm also doesn’t see other potential acquirers entering the mix here either, both strategically and financially. Stifel has a Hold rating on eBay.