GameStop CEO Ryan Cohen’s $56B Plan to Take Over eBay

Everyone hates GameStop and it seems. like everyone in the media basically. wants us to fail and wants them to. succeed and you've got a board that's. making hundreds of thousands of dollars. a year. They don't buy stock with their. own money. They end up showing up to a handful of. board meetings and they're making a. fortune. You've got a management team. that is grossly overpaid. There's. nothing more American than basically. risking your own capital. So, why does. everyone want us to fail? >> I'm going all in.

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to launch your first campaign today. >> I'm going all in. >> Ryan Cohen, welcome to the All-In. interview. Thanks for being here. >> Thank you for having me. >> I think it's been like a decade, which is crazy how old we get, since you. and I last had dinner. in New York. This was before several chapters of your. life unfolded. And it's great to be talking with you. today. You're doing something really. interesting right now trying to acquire.

and run eBay, which obviously is a big. story right now that takes us back 25-30. years to the start of the internet. But, I want to talk a little bit about. your story first, if that's okay. And. I'd love for folks that are watching. this or listening to this to to learn a. little bit about you. and the journey you've been on that. brings you to this moment. Maybe we can. go back to the the business you started, Chewy, if that's okay. >> Yes, definitely. >> Yeah, well, maybe tell me why you. started Chewy. How did you get that idea. and and how did you get into building.

this business. from where you were coming from at that. time? >> We were um. wanted to build something online and we. were uh about to launch an online. jewelry website. Did not know anything about jewelry, went to a bunch of trade shows, bought. hundreds of thousands dollars worth of. inventory. Built the website, had the distribution, and then I was shopping in a. neighborhood pet store.

Uh I had a poodle and I was going every. few weeks and. it just hit me on one of my trips that I. understood the product much better. It. was a recurring revenue purchase. The market was still fragmented. The. fact that there was still neighborhood. pet stores at the time and they had not. been disrupted by Petco and PetSmart was. fascinating to me. And then you had you. had Amazon which was established and had.

pet products since the '90s, but they. hadn't really achieved real scale in the. category. So, the vision was to. replicate the same experience that I had. at the neighborhood pet store, but do it. online and do it at scale. And. I looked at Amazon as bre- best. practices when it came to supply chain. So, fast shipping, having a great. selection, being competitively priced. And then the experience at the. neighborhood pet store.

of knowing the products really well. And. it was easy to be passionate about the. pet category cuz I'm a pet owner and. everyone we hired were pet owners. And. the it was all about market leadership. It's a low margin business. Hindsight. not necessarily the best idea to go. head-to-head against Amazon selling. 30-lb bags of pet food, but we executed. really well, and we grew really quickly, and we had negative working capital, and.

so it was a business that was able to. get uh billions of dollars in revenue. and and not consume a lot of capital. >> How did you learn to execute well? So, at the time, you had little business. experience prior to that. How did you. learn those skills? What were the. principles and the values that that made. you. excellent at operating that business? >> I understood from the beginning that. uh the real competition was always. Amazon, and they were world-class when.

it comes to supply chain. So, negotiating. very fiercely with suppliers to get the. best product cost, and that meant. getting to scale and going from buying. pallets of dog food to truckloads of of. dog food, and moving from distribution. to direct, and buying generally, the. more you buy, the lower the prices are. going to be. Operating efficiently in.

the warehouses, and so labor. optimization, warehouse management. optimization, getting competitive prices with shipping. carriers. It was a game of pennies, and. we had you know, we were the the goal. was to grow quickly and establish market. leadership, and the difference between. failure and success was, you know, pennies in the red is failure, and and. and pennies in the black is success. So, uh we had to operate hyper-efficiently,

and there was a lot of competition in. the space. It wasn't a novel idea. I was. going head-to-head against Amazon, and. pets.com was in the backdrop. Um so, it. made it very difficult to raise capital, but I'd say at a at a high level, the. market underestimated. not not the size of of the addressable. market, but our execution. >> You know, as a customer, I've had lots. of dogs, it was always such a great. consumer experience. Did you personally.

put your finger on that or did you bring. great people around you that understood. consumer. apart from the supply chain. optimization, the labor optimization, getting the. the cash flows to work right? Was there. a lot on the consumer product angle that. you spent time on with that business? >> When we looked at. the cohorts, you could see the customers were very. sticky and. the. Now, I I looked at it. The reason why I. moved from jewelry to pet food was cuz.

it was a recurring item. So, I loved the. fact that it was consumable and when we. started Chewy for the first few years, we just focused on. food, treats, litter, all of the things that people are buying. all the time. So, the the vision and the idea was if we. treat our customers well, they're going. to continue shopping with us. And and that's what we did. And so, it. was everything from the handwritten. holiday cards to the pet portraits to. 24/7 customer service. And.

uh if there was ever an issue, you know, we took care of the customer. And. that um that's what happened and and the. customers continued. shopping with us. And and the best. referrals are word of mouth. And um pet. owners. love to. to tell their friends and fellow pet. owners if they have a great experience. So, the thesis ultimately played out. >> So, for those who don't know, you built.

and sold the business in 2017 for $3.35. billion. Subsequently, there was an IPO and that. business continued to trade up in value. So, you clearly executed well. But, uh. help me understand how did you. build and manage the leadership team, the management team, and the people. around you to execute so well? What did. you learn as a manager, as a CEO, as an. operator. when you were building Chewy? >> Staying on top of everything. Uh just. it's 24/7,

watching all of the numbers. I mean, I. would uh. stay in Google AdWords till 4:00 or 5:00. in the morning managing campaigns. myself. Um. I was negotiating directly with all of. our major suppliers. I had a supplier. that told me during one of our. negotiations, actually, said it was like. a one or one-year contract and he's. like, "I'm so happy this is over. I. never have to talk to you for Well, it.

was [laughter] it was basically another. year." He's like, "I don't have to speak. to you for the next year." It's like, "That was a compliment." I would And. anytime someone else was doing the. negotiation, I mean, it's. counterintuitive. They want to build. relationships with suppliers. The. reality is is. it's mostly transactional. And so, if. our suppliers are sending us gifts in. the mail, that's a really bad sign. It. means we're overpaying. If our suppliers. are telling us they never want to speak. to us again, it means we're getting the. right price. But, getting people into. that framework is not easy cuz the the.

the path of least resistance is. basically to get along and and uh. to be nice. But, unfortunately, when. you're building a business and you're. losing money, you got to focus on on. sustainability. So, just uh. being on top of everything. >> And what about our people? I'm just. trying to understand your your skill as. a manager of people because clearly you. did something right. Continue to execute.

at GameStop, which we'll get to in a. minute. And I'm trying to understand how. do you find great people. and how do you hold people accountable. and what are management techniques that. you've developed for building a team and. running a team? >> I look for will over skill and. I had a woman that was running customer. service as an example and she came from.

uh she was working in like an old. people's home. and she applied for the job many times. and we just we didn't think she was. qualified and we looked over her resume. and she kept on applying. She was. relentless. Uh. so on paper she didn't necessarily have. the right experience but she had drive, she was motivated, she wanted to work. and she ended up being incredible. So I.

mean it was in general it was finding. people that are diehards that are just. willing to put everything in, go all in, no pun intended. Um and basically be as. psychotic as as me and that was the team. that we put together. It was just a. bunch of fellow psychopaths. >> And psychopaths attract psychopaths and. the engine is running at that point. >> Exactly. Exactly. >> Yeah. A's only put up with A's. >> Exactly. >> Yeah and do you regret selling Chewy.

when you did? Cuz I mean it went public at like what. 20 billion market cap like 2 years. later? >> I mean. as soon as I sold it it just. >> Yeah. >> [clears throat]. >> Yeah. Like it's like were you a liability? No, I'm like what happened? >> Wise I mean. you know typical if you talk to the. investment bankers there were like you. know we're getting a. an amazing price and then all of a. sudden it goes public and there's. basically a lot more than what anyone. had guessed. So nobody has a crystal. ball.

Um. Chewy was my baby. I put a lot of uh. I love that business and. um. So, yeah. And everything everything. works out for a reason in life, one way. or another. >> Yeah. >> And we wouldn't be having this. conversation if I was still running. Chewy. So, I or at least maybe we would, but it would be about dog food instead. of something else. >> We'll be talking about how you built a. hundred billion-dollar market cap dog. food company, but. >> Exactly. >> So, after you sold it,

you kind of became a pretty active. investor. Is that a fair statement about. the next chapter for you? >> Uh I went activist for the first time, yeah. That's that's a that's an accurate. statement. >> Well, you were like a pretty active like. just general like you would buy and hold. concentrated positions in in stocks. Is. that is that fair at that stage? How did you pick companies? So, what did. you look for and how did you make the. investments you made? Maybe you can walk. us through a couple of the. stories of what you you went through at. that stage.

>> Um. I looked for established businesses. that have a. strong historical track record of making. money. and typically are out of favor when it. comes to passive or activist kind of. investments. And so, um. that's been my general framework. >> Why did you choose to go activist when. you kind of started making these? Were.

you getting frustrated in conversations. with management, decided to take it. public, or was there a a model that you. were kind of going after where you saw. others have success. with publicly calling out issues in. businesses and driving change? >> Well, when it came to GameStop, originally it was a passive investment. And I owned under 5% and the CEO. actually reached out to me cuz they were. fighting um an activist.

and they wanted me to join the board. They thought I was basically going to be. their friend. They're like, "Oh, this. guy owns a few percent of the company. and let's give him a board seat and. he'll help us basically fend off. um this activist." And so. they kind of put the idea in my head. >> This is around 2020, right? >> It was yes, exactly. Uh. so I was in in a place. Uh my father had.

just died recently and they offered me a. single board seat and I'm like, "If I'm. going to do this, you know, I looked at. the board and they had a really large. board and they're offering me a single. board seat and it just wasn't. attractive. And then. you know, COVID things got a lot worse. They were deemed a non-essential store. Basically like kind of on the verge of. bankruptcy. The stock traded down. significantly. And then I continued accumulating.

I ended up going above 5%. At that point. I needed to decide, am I going to file a. G or D? A 13G is basically if you want. to be passive, which means you're not. going to engage with the management team. at all and a D. is where you are going to engage with. them. So that was an easy decision once. I crossed over 5% and I remember. actually getting a call from the CEO of. GameStop at the time and he's like. yeah, we were discussing me going above.

5% and and filing the required SEC forms. and he's like, "Did you file a D or G?". And I'm like, "A D." And a D obviously. is. you know, it's intended that you're. going to be activist even though it. doesn't necessarily mean you need to be. hostile. It just means you're going to. engage with the management team. So um. Anyway, basically that's uh that was. what happened. >> But going back to GameStop, how did you. first identify GameStop cuz the.

the kind of. storyline is, "Hey, Wall Street Bets put. something on the internet and everyone. starts paying attention to it and. becomes a meme stock.". Was there fundamental unrealized value. you saw because you seem to be. a real kind of unrealized value investor. is how I would kind of describe. Tell me. if you disagree. That there's real value in an. organization that's not being realized, its potential. What did you see in GameStop? How did. you first identify it and get involved? And.

start accumulating. >> I found it fascinating that. everybody was like. for whatever reason and still to this. day everybody hates like the. the mainstream media. the. the general consensus has been that. GameStop is going to be is go was going. out of business like a long time ago, right? Like 15 years ago. This thing was. basically shorted to oblivion. Uh and everyone was betting against it.

and everyone's basically just hated it. It's one of those things where when you. even say GameStop, everyone's like, "Uh. like really? You're an investor in. GameStop?". So, that's always for as long as I. remember, that's basically been the. reputation. It's like the underdog. Everyone loves to take the other side of. the trade or bet against it. And so, I. like that. Like I like the idea of going. into a situation where you're basically. running into. you're running into a burning house. And.

I originally did it as an investor cuz. typically that's where you see. opportunities is when there's a lot of. pessimism and fear. And then, you know, I ended up basically. not necessarily intentionally. uh joining the board and then ultimately. being the CEO, but that wasn't the. original plan. The original plan was. basically to be a passive investor and. then I basically ended up just it's like.

there was no one else to do the job, so. someone needs to do it and here we are. today. >> Was there a thesis on value realization. or was it just about the market had the. value wrong? Did you think at the time. there was operational changes that could. drive more value? Or was it just like, "Hey, everyone's. got this shorter Everyone's got this to. the wrong side."? >> The original thesis was that there's an. upcoming console cycle and that they're. probably going to survive until the.

upcoming console cycle and the new. PlayStation and Microsoft Xbox comes out. and it was a very cyclical business and. GameStop typically does very well in the. beginning of the console cycle. when the market is very, very tight and. people are basically. running the game GameStop to buy. hardware and software. And so that was. That was the original thesis. And then. as I got pulled in, obviously the. business is completely different and the. thesis has changed. Uh but that's where.

I started as a as a passive investor. >> So then they ask you to join the board, but. you make the point, "Hey, if I'm going. to be involved, I need to have more. board seats." Is that kind of how the. evolution. >> Yeah, they thought I was basically just. going to join the board and be a patsy. >> Right. And then you said you probably picked. the wrong guy. Uh I think that that was. going to be the case. So then you went public with your views. Is that Is that right? And you kind of.

So I think it was 2021, like early 2021, you joined the board. with two other executives from Chewy, two friends of yours or two two. colleagues of yours. Is that Is that. right? >> Exactly. >> And then the stock took off and all of. the hedge funds that were short had to. cover and the stock price just ripped. >> Exactly. >> This is the whole story. So, then in. 2021, the company raises. billion seven, wipes out all the debt, and what was the plan at that point in.

the business cycle? Was there an. investment operating plan that you were. trying to get the the team to execute. against? >> The original plan. I. learned a lot at GameStop. I basically. took I went in and I had this. bias from Chewy, which is basically like. everything that I learned at Chewy I was. going to apply to GameStop. And. it took me about.

I don't know, maybe. just over a year to realize that was. really really stupid. But I ended up. hiring a bunch of e-commerce people from. Chewy and Amazon, and I wasn't the CEO. I hired a CEO, so. you know, I I didn't have day-to-day. visibility on what was going on. But the. strategy was to make GameStop more like. Chewy. And that was the wrong strategy. And.

once I became the CEO, I quickly adjusted because I mean I just. frankly I looked at the financials and. saw it didn't make any sense. And then it was you know, went into. maniacal cost-cutting mode, efficiency, basically focusing on what GameStop is. really good at, which is the pre-owned. side of things. Um and. focused on running the retail business.

very very well. And then ultimately that led us to the. category, the category of collectibles, which yeah, today the business is a. leader in the collectibles category and. uh software makes up a very small. percentage of the business, but there. were a lot of learnings on the way and. you know, you look at basically Chewy. and GameStop, you say, "Well, they're. both retailers. You take the same. playbook." But, that's not That was not. the case. Uh totally different animal.

And you know, one is you've got repeat. purchases and you've got these really. sticky cohorts and you know, we can. never overbuy inventory for instance at. Chewy because. you know, we would end up ultimately. selling it. The revenues were growing. and we turned the inventory very. quickly, whereas. we ended up buying all kinds of. inventory at GameStop and ended up. having a bunch of TVs and uh. inventory that ends up getting stuck in.

the stores. And if you don't sell it, you end up basically taking down, you. know, losing a lot of money and marking. it down. So, a lot of learnings along. the way for me to understand physical. retail, which when I joined the board, I. had When I became CEO, I had zero. physical retail experience. So. >> Did you think a lot about here are the. different categories we could leverage. this GameStop network, the stores, the.

consumer. into besides collectibles? How did you. kind of pick the expansion into. collectibles versus. any other sort of used category you. might be able to kind of move into? >> We were already in the category. We. weren't deep in the category and we did. try a few different other things within. consumer electronics that just. really didn't end up taking off like. collectibles did. And um. you know, if you look at. at TCG in particular, but now we're.

growing uh. in sports as well has been very very. very popular. So, we tried a few. different things and. the the trade-in model especially, you. know, worked really well where like. today you could basically bring in a Not. basically, you can bring in a. graded PSA card eight and above and we. will give you cash on the spot. We buy. back the card and then we either sell it.

in the store or we bring it back to our. warehouses and we sell it online. So, that was very similar to the trade-in. model that we had on both hardware and. software and it was very extendable to. the trading cards category as well. >> As you made this change, did you have to. change the team a lot? Management team? I mean, what was the turnover like after. you became CEO at the leadership level. and then below the leadership level? >> It was identifying.

the talent at the company and basically. having them working directly with them. Like the the people who know GameStop. the best have been. the people that have been there for a. long time and me working closely with. them. um ended up working really well. >> You brought others obviously as well. To compliment them. >> Yeah, some some, but I mean, generally. it working with uh the people that have.

been there that know the business really. well. >> Yeah. Some. folks who have managed multiple. businesses or been CEO and applied. their skills to different business. lines, you know, I interviewed this guy Charles. Koch uh a few weeks ago from Koch. Industries. He's got a whole set of. principles that he tries to apply to. running a business. And those principles he's used to build. and acquire and operate multiple. different kinds of businesses and he. transforms the business by applying his.

principles to how he runs them. Do you have a similar sort of framework. or model or machine that you use for. running the business, assessing what's. working and what's not working. that you then bring to bear on. GameStop, on Chewy, and maybe next on. eBay that you've used repeatedly that. works well for you or is everything kind. of truly. zen mind, beginner's mind, first. principles approach to thinking about. the business? >> I'm sure I do, but.

I'm not good at articulating it. So, I don't know if I'm the right person to. be able to say what's going through my. brain. Sometimes like. whatever I'm feeling, I can't even. necessarily describe it and if I. describe it, it ends up being wrong. So, someone else could probably do a better. job answering that question than me. >> What do you think someone else that's. worked for you repeatedly would say it's. like to work with you?

>> You'd have to You'd have to ask them. >> Okay. So, let's go through the. >> things. Hopefully not good things. >> Yeah, the pressure's on. >> As the global economy becomes more. connected, trust becomes the most. valuable asset in the system. Nasdaq. analyzes 1.8 billion transactions every. week and when a fraud pattern surfaces, it institution, AI strengthens detection. across the entire network within hours. That is what it looks like when trust is.

built into the infrastructure itself. Built for the economy that is arriving, find out more at nasdaq.com. >> [music]. >> The numbers speak for themselves in. terms of what you've delivered at. GameStop. I think collectibles is now. 42% of revenue. 350 million dollars in Q1. Revenue was. 835 million. You grew at 14%. year-over-year. You cut SG&A from 228 to. 202. You have 9.7 billion in cash.

333 million in free cash flow. And the board's just authorized a share. repurchase. So, it's pretty tremendous. how you've operated. this business. So, so help me understand. a little bit as you're building. GameStop, operating it, and executing, what makes you lift your head up and. say, "Hey, we should be doing. acquisitions and looking at other. things". instead of just building everything. organically in-house? >> If you look at the size of the business. that I can build.

organically with GameStop, it's nice. It's okay, but. I like to do big things. And, you know, Chewy is a good example. It could have been a $500 million. business. It could have been a $100. million business. It could have been. profitable if we would have spent a lot. less money on marketing, but. life is too short to do it small. So, we have.

the If you look at how complementary. and. as we've gone into the collectible. space, I've come to appreciate eBay. uh. differently. And if you look at how complementary. these two businesses are from a a lot of. different dimensions. The secondary market side of the. business, the collectible side of the.

business, the ability to provide. liquidity to consumers, what we're doing in stores, eBay is. doing online. Um. Authentication of second-hand items. There are. There are so many. aspects of the business that are similar. except that eBay is global and has. significant scale.

Um. and frankly it's a business that. I understand a lot better than physical. retail. cuz I know a thing or two about. e-commerce and it's an area where. frankly I'm much more comfortable. operating. And so when you look at how. much the businesses together makes sense. and then you look at. the fact that it's within my circle of. competence. It's. uh. all.

I can't stop thinking about it. So. I look at Chewy as like. Chewy in hindsight, we had a lot of. competition in the pet space that were. really well funded and they were decent. operators and they didn't end up making. it because. you know, it was a low margin business. going head-to-head against Amazon and. it's similar to like. the.

the airline industry where people don't. really care about the actual airline. they're flying. They're just basically. shopping by price. So. >> Yeah. >> That That was selling pet food online. Not a great idea and you know, GameStop. I don't think was such a good idea. either. This was This is actually a. really good idea whether it ends up. working out or not, but this is actually. a really good idea. We'll see what happens. So. >> Was there a moment you remember. when you said. we should make a play.

for eBay. Do you remember that moment when you. were kind of looking at the business or. thinking about the business. when this idea kind of sprung forth? >> Yes, I do. >> What was it? >> I. >> [laughter]. >> I was on the toilet. >> Okay. And you were just thinking about it? >> Pretty much. >> [laughter]. >> I'm assuming you've been studying the. business cuz you're in the collectibles. business and learning a little bit about.

it and. had this idea sitting there. >> Yeah, I mean I followed eBay for a very. long time and I came to appreciate their. um. their. their experience their uh their their. moat in the collectible space. But it's not just collectibles too. I. mean it's the refurbished tech piece of. the business where. >> Yeah. >> GameStop. it's a big portion of our business and. it's a big portion of of eBay's business. too.

The second-hand business as well. So. there were other things that. I thought about where I could personally. add value and might make sense for. GameStop. But this one made sense for me. personally and it makes sense for. GameStop. So. >> Mhm. So if you. have studied eBay. what do you think. the team did right in the early days? Was it simply the network effect and the.

business took off? And once they had the network it was. hard to break the moat. Was there. anything about the formula or the. consumer model or experience cuz you. you've said publicly hey eBay looks a. lot like it did in the early days. Was. there something about early management, early design principles, early. engineering, anything that happened in. the early stages of eBay that made it. what it is today? >> I you know, I look at basically the. marketplace model where they had. first-mover advantage. So their ability.

to have first-mover advantage and really. be the like de facto marketplace online. including against Amazon was was. significant. Um. So, that was really helpful. I wouldn't say that. if you look in general at the growth in. e-commerce. and you look at Amazon as an example. that basically took the marketplace. model, but also took taking possession. of first-party inventory along with.

growing their marketplace and like they. ultimately scaled it and they. essentially did what Walmart was doing, but they did it online at scale. I mean. obviously. you can't compare the two. But, they they their focus on building a. marketplace. gave them a moat and staying power, but. I wouldn't say that their execution. was great. In the early days, it was. great when it was founder operated, but.

since then if you look at how much. e-commerce has grown and how much market. share they've given up to the likes of. basically everyone, new competitors in. the space that are very category. focused. Live shopping competitors picked off. significant share from them. Shopify, social commerce, Amazon, eBay's. been able to maintain a revenue base and.

and and generate earnings, but they haven't grown along with the. rest of e-commerce. So, and and if you. look at how they've done most recently, I mean they've basically the business. has stagnated up until the last few. quarters and their operating expenses. are up significantly. So, um. It's not to say, you know, they've they. they they are the de facto marketplace. online especially in certain categories, but that business should be. significantly larger.

>> Do you think they missed. the boat and if so, why on stores? You. know, Amazon stores, Shopify obviously. have become categories onto themselves. All of those power sellers probably. transitioned over to having stores at. some point. What did eBay miss? Was it purely execution and is there. still an opportunity to win back that. market? >> eBay could I mean and and I'm not. advocating I mean this is not something. I would not go head-to-head against.

Amazon today, but I mean eBay could have. been Amazon. So, when you look at what. Amazon has built, I mean everything from. uh taking inventory and their principles. of. they provide a great customer. experience. And so, I mean that's why we. all love shopping on Amazon. And as a. seller, Seller Central is a very. powerful platform and sellers generally. like it, too. I don't know if they. necessarily like the margins, but they.

can move a lot of inventory on Amazon. So, eBay. by doing nothing has basically carved. out a niche in certain categories where. Amazon. isn't strong because they're strong in. other categories and you know, you're. buying a a phone charger or new. products. It's not necessarily the place. where you want to search for like a uh. a unique baseball card or a a.

hard-to-find pen or a used auto part. I don't know if it was necessarily. through strategy or just because they. ended up. they ended up basically like defaulting. into those categories cuz. their largest competitor was focused on. other things. >> Do you think Amazon's over-earning right. now? Cuz I I think the point you made. resonates with me. I've been involved in.

a number of businesses I've been on the. board of and I see the margin that. Amazon takes for seller from sellers. And everyone's frustrated about it. It. almost feels to me like everyone's. hungry for an alternative. But the. reason you stay on Amazon is the reach. and the audience that you get with. Amazon. So there's not a lot of other. places that offer a competitive. alternative to Amazon to those sellers. eBay's got a pretty big audience. I mean. do you think that. Amazon's over earning in that sense and. is there an opportunity for eBay to step.

up and. compete in that sense? >> They charge a lot of money to their. sellers. I I agree with you. And um. sellers like it because they move a lot. of inventory but they don't like the. margins. >> The problem would obviously be. inventory, right? I mean if eBay were to. go in that direction and you were. running eBay, what do you think you'd do. about inventory and logistics? >> I would not be interested in taking in. first hand inventory. >> Right. >> I like. the marketplace. model.

And and the categories where eBay's. doing well are categories where GameStop. is doing specially well also. But um. going head-to-head against Amazon. is um. it's uh it's it's it's not the most. attractive business. >> eBay is notorious for having bought and. then sold a number of big businesses. They bought PayPal and then later spun. it out and divested and they bought.

Skype for 2.6 billion in 2005. and then sold 70% of it for 2 billion in. 2009 and then they got lucky with. Microsoft over paying in 2011 and they. made another 2 billion on it. So they. they netted a good profit on on the. Skype sale. So when you think about the audience. that eBay has the the the user base. there's a lot of ancillary businesses. you could get into. When you look at. PayPal, when you look at Skype, were those strategic errors or were they. tactical errors, meaning they were good. strategic moves but they were mismanaged.

and not well integrated, not well run. after the acquisition? What do you think. happened there? >> Well, if you look today at eBay, I mean, I like. focus. So, them focusing on core eBay. makes sense. I mean, my strategy at. Chewy wasn't creating all these other. sub brands for different geographies. It. was always focusing on on Chewy. So, um.

the focus is helpful. I'd say in eBay's. case hasn't resulted in significant. GMV growth if at all or earnings growth, but I do like being focused. Now, I. mean, they've recently made acquisitions. which. uh don't make sense, but generally. speaking, like. I like focusing on a singular brand and. especially with a business that's. global, there's a a lot of upside and,

you know, eBay plays in a ton of. categories already. So, it's hard to do. multiple things exceptionally well. >> Yeah, the other example, obviously, StubHub which they bought and then sold. to the founder Eric at Viagogo. for 4 billion years later, but also. didn't didn't really transition well. Does that mean that eBay can't really do. well in other marketplaces or do you. think it's about building the product. organically in a better way to expand. into other marketplace verticals? >> Yeah, building it. organically through eBay and through.

focus. Um. is is where I where I where I believe. makes the most sense. >> What's happened with the business in the. post-Donahoe era? He left, I think, what. did he leave, uh, a couple years ago? 2015. And it's been about 11 years. I mean, if. someone were to ask you, "Hey, give me. your summary of what's happened to eBay. in the last 11 years." How would you. kind of talk through. what's happened in the business? >> I mean, if you just look at how they've.

done in the past since COVID, every important metric is down. Uh, GMV's down, active users is down by. 30 million, operating earnings is down. Revenue now is, you know, basically. essentially break even. It's up a few. points and operating expenses is up. significantly. Their operating expenses. now are, for a business that has no. inventory, their operating, their.

revenues are, their operating expenses. are over half of their revenues. So, that's a business that. they're not growing. Everybody else in. e-commerce is growing. And they're making less money and. they're spending a lot more. And their. sellers, frankly, aren't happy. Like, it's you talk to sellers and in order. for them to do business on eBay, they. have to use all kinds of third-party. tools outside of eBay because.

eBay's not even providing those tools. I. mean, Amazon Seller Central. is is, uh, is like soup to nuts. You could pretty. much do everything in Seller Central. Whereas with eBay, uh, it's a pain. And and. they alienate their sellers. I mean, they had concierge programs for their. top sellers and now it's like they take. their sellers for granted and they're. taking advantage of them. So, the. sellers.

in a marketplace model like eBay, the. sellers are the customer. You make your. sellers happy, you give them the tools, they bring more. inventory online and you end up. ultimately doing more sales and. they're not working with their sellers. to make them happy. So, it's not that complicated. You talk to. the sellers on the phone, you talk to. the top sellers, you ask them what are. the pain points, and you get the. engineering team on the phone with the. sellers, and you start basically banging.

them out. But, you know, I guess uh. existing management team doesn't roll up. their like they're not going to roll up. their sleeves. They're going to go to. outside consulting firms to tell them. how to run their business. >> Is that what's happened? What you state. seems obvious. So, do you think it's. that management simply been. complacent and collecting a paycheck and. no one's acting like an owner? No one actually knows how to execute, or. do you think they fundamentally would. disagree with that strategy, those. points that you're making?

>> Well, I mean, they're never going to. admit it, but I would. I would bet everything that they're. working with multiple outside. consultants, and for different for a lot. of different reasons, and they're not making their sellers. happy. So, their sellers are on the. platform because they do a lot of. business on the platform, and they want. to move product, but. they don't feel like eBay. is wants to make them succeed and is.

working with them to do more business. together. So, that's what happens when. you go from a business that founder. operator run to business with a. professional management team is, you know, you lose the. the one-on-one and the. just the rolling up your sleeves, really. getting into solving the root cause of. problems. >> Do you believe in building.

long-range operating plans, meaning. would you articulate a strategic vision. for eBay? And then write out what you're going to. do over the next three, four, five years. so that the shareholders that are. considering your acquisition offer. can see both your vision and your plan. for execution on that vision over the. next several years. Or are you much more. of a responsive manager where you're. going to go in and diagnose and be much. more of a tactician in iterating almost.

in an agile way the business. to success? How do you kind of think. about presenting how you're going to be. more successful in operating this. business than existing management? >> So, there are three areas. Number. one is on immediately improving earnings. through cutting costs and. pulling $2 billion of costs out of the. business. And on the operating base of, you know, close to 5 and 1/2 billion of.

expenses, um and 2.4 billion spent on sales and. marketing for essentially no user. growth, um there's a lot of money to pull out. there. So, you have the immediate. increase in earnings through. cost-cutting. That's basically one. And. then there's two growth vectors that. um I'm very much interested in. Number one is live commerce. And there's.

a large competitor that is completely. crushing it. And eBay has the users. eBay has the brands. They have a. platform, but the platform sucks for a. lot of different reasons. Uh and they don't have the content. creators on the platform, and nobody. even really knows eBay Live exists. There's like an application process. I. talked to sellers, and they're telling. me like they have applied to be uh, to.

be a seller, and they need are waiting. to get approved. It's like they're. basically stopping themselves from being. successful and getting content creators. onto the platform. Uh, and then the entire back end of eBay. Live also sucks. So, live commerce, the. TAM is like 400 billion. It's growing. very quickly in the US. It's very. popular in Asia. And eBay Live should be. significantly larger. They should be the. category leader in the space. And they.

have like at max a few hundred people, you know, in. um, you know, basically watching watching. their uh, watching watching their sales. So, that's a huge huge growth opportunity. for them to start doing really well in. live commerce. Uh, and the benefit also. we have with the stores beyond basically. fixing the platform, the front end and. the back end, uh, using the stores, they're 1,600.

essentially nodes that can be used as. studios for creators. They could be used. as fulfillment and logistics, and. ultimately allowing sellers and the. content creators do what they do best, which is create content, and we can help. them on photography, we can help them on. fulfillment, we can help them on. logistics. Um, and we can also do the. authentication. And that extends to the. marketplace model as well. So,

uh, I would focus a lot on on growing the. live commerce side of things beyond the. cost cutting. And then the third thing. is, and this is something that I have. not. spoken about before publicly, but eBay today. is the leader in. physical items, physical collectibles as. an example. And so, I would extend. the that into digital collectibles. And.

essentially, if you look at all of these. in-game items, AAA titles, that people. are accumulating, skins, weapons, all of these things, taking eBay and. building a marketplace where you can. provide the liquidity for in-game. digital items. Essentially, it's what. NFTs. could have people thought they were, but. ultimately, they had no real utility.

In-game items actually have real. utility. And if you look at all of these. collectibles, frankly, they're an ego. play. You own art, like, what is that? The end of the day, it's an ego play. Um if you look at trading cards, I mean, it's a piece of cardboard in a piece of. plastic. And they're very, very, very popular, but there's no real utility to them. other than being able to tell people. you've got these really a really unique.

trading card. But if you look at in-game digital. items, there's no marketplace that is. providing liquidity for them. And so, I. would use eBay. to. uh to provide liquidity for in-game. digital items. And I believe that. addressable market is significantly. larger than. uh I could be much larger than. eBay's marketplace on physical items, and no one's doing it. And And this. should already exist. And it's kind of.

it like it's crazy that it doesn't. exist. >> The eBay board has rejected your offer. Is it that they're looking at Ryan Cohen. saying, "Hey, you're a guy that ran. Chewy for a few years and sold it, and. you've been running GameStop. You've. never really operated a business of the. scale. We're not going to hand over our shares. for your shares, and put you in charge. of this overall enterprise. You don't. have the experience, you don't have the. skills, you don't have the competency. What's their rationale for rejecting. your bid and what's the feedback, the. frank feedback you've heard either.

behind closed doors or through, you know, third parties about what's. going on here? >> Well, they put out a rejection letter. which said that our offer was. incredible. And there was a lot of uncertainty and. you know, frankly, and by the way, I. mean, this is expected. They don't want. to hand over the reins, they're making a. lot of money and so I completely. understand why they're taking the. position that they're they're taking.

But, you know, they they spelled it out. in the rejection letter and number one. was uh, you know, that like the the. financing uncertainty, which frankly, if. we can't get the financing, it means. that eBay can't get the financing cuz. we're getting the financing off of. eBay's balance sheet. But, there's been. very, you know, there has not been very. much engagement from the management and. board level. Frankly, there's there's.

been really no engagement. I mean, they're they're playing games. They. pointed us to their high-priced advisers. and then when we reach out to schedule a. meeting, they they don't schedule the. meeting. So, >> So, when you first started having. [clears throat]. this idea sitting on the john and you're. like, I'm going to move forward with. this thing. I'm assuming at some point. you called bankers and talked about. structure around this. to figure out how do we put this bid. together?

Where do you go down the path where you. said, let's do. half cash. and then convince them to take our stock. and basically roll their stock into our. stock and let us run the business versus. raise the capital to do an all cash. offer for the company? Is it impossible for you guys to. convince. shareholders, investors, capital. providers, large institutions, banks, lenders, and so on to put together a. syndicate of $56 billion of cash so you.

could make this an all cash offer. which would make it a lot harder for. them to simply reject so easily? Maybe. you can walk us through the banker. conversations and the process you've. gone through in thinking about structure. here. >> Ultimately, the decision is who do you. want to run the business? And who do you think is more competent. to run the business and who's going to. maximize shareholder value because. by giving. existing shareholders GameStop shares.

shares. uh. GameStop, the combined company. the at least. in the very near to medium future, the. earnings are coming from eBay. So, they're going to continue owning eBay. We're offering them 50% cash, 50% stock. at a premium to where we bought it. And essentially, they get to continue. owning eBay except you've got someone.

that is highly incentivized to maximize. shareholder value knows a thing or two. about e-commerce and running the. business. efficiently. >> But why not go all cash, Ryan? Like why. not raise the capital? If you can raise half the cash. to do the bid, why not raise all the. cash, sell your shares, sell sell. GameStop shares to investors to raise. the cash that are aligned with you. rather than the investors that own those. eBay shares, and then go make them an.

all cash offer? >> I mean. that is not what we've presented today. and that's a lot of cash to. to come up with. So, um. you know, uh. we don't have uh $60 billion of cash. just lying around. >> Right. Well, tell me about the the the owners. Have you spoken to any of the. shareholders at eBay? And do you have a. view on how they're thinking about. voting their shares? My understanding is.

there was recently. a rejection on the ability to call a. special shareholder meeting. There was a. vote that failed to reduce the threshold. to 10% of shares outstanding. It's. currently at 20%. So, that failure means. you cannot call a special shareholder. meeting without 20% of the shares. calling for it. Is that right? Um. >> Yeah, it was close. It was close, but. that's right. >> And so, if you go through and start. talking to the actual owners of eBay. today, cuz it it's a pretty.

broadly owned, institutionally owned. stock. Have you started having those. institutional conversations to see where. folks are at and how they're feeling. about management and how they're feeling. about your strategy and your ability to. deliver value for them over the next. couple of years? >> Yeah, I mean, I I don't want to um. I don't want to get into individual. shareholder discussions, but. >> Yeah. >> the consensus has generally been. aligned, which is they love the. business.

Um and yeah, they they see a lot of. opportunities. So, we'll see what ends up ultimately. happening, and maybe the composition. could shift because, you know, if you. love the business, you might not want 50% cash. You might. want to stay invested. So, you know, that that's a possibility, too. Ultimately, the vote is on who's going to be a.

better fiduciary of capital and and who. can grow this business, um me or or someone that's basically. selling stock hand over fist and by the. way, has not bought a single share. [snorts] of stock in the open market. with his own money. And he's been selling tens of millions. of dollars. And you know, the. interesting thing in this. and maybe you can help me understand. this is that there's no question what. we're doing, what I'm doing is uh it's.

big. You know, it's not every single day. that something like this occurs. But why. does everybody want us to fail? Why does. everyone want GameStop to fail? And why. is everyone like the media is an. example. Why is it that you've got a. management team with no skin in the. game. They're not builders. They haven't. built anything themselves before. They've basically just been employees at. major companies have been overpaid. I.

don't think they've ever broken out a. sweat in their entire lives. Why does. everyone want them to succeed? But when. you have someone that and by the way. um, this is going to be coming out. It. hasn't been filed yet. Maybe by the time. that you know, when this airs it will. be. But I'm putting 500 million of my. own money into this transaction. I. haven't pulled a penny out of GameStop. I've invested. a lot of money into GameStop. I've been.

doing it for a long time. GameStop's a much stronger business. today. Everyone hates GameStop and it. seems like everyone in the media. basically wants us to fail and wants. them to succeed. And you've got a board. that's making hundreds of thousands of. dollars a year. They don't buy stock. with their own money. They end up showing up to a handful of. board meetings and they're making a. fortune. You've got a management team. that is grossly overpaid with taking. zero risk. And why is everyone basically.

want this entrenched. management team and board to stay like. protected and to continue running the. business and doesn't want. There's nothing more American than. basically risking your own capital. So, why does everyone want us to fail? Commentators. What's your theory? I don't know. Have you sat down with their CEO? I would love to. He won't take the meeting? I would I.

will fly to California tomorrow. No. >> And. I mean, you're the guy that's going to. fire him. But, he's going to get a payday, right? >> A big payday. >> A big payday. What's his parachute? >> parachute. >> Do you know what the parachute is for. him? >> It's over 100 million bucks. >> So, he'll get 100 million to walk away. >> Yeah. >> Have you met with any of the board. members? >> No. >> They won't take the meeting. Have you reached out? >> Yeah. >> The great thing about markets,

they don't care what the media says. On. the short term, they might. It's a. voting machine, but on the long term, it's a weighing machine. And if the performance. continues to be delivered at GameStop, people that might want to see the. company fail are going to lose cuz. you're going to get. the weight, right? That's ultimately. what's going to matter more than. anything here. But, I I would assume that at this. point, seeing the results at GameStop, folks have to start paying attention. that this isn't just a meme stock. I do. think that the media, in order to give you credibility,

and this would be my take on this, they're going to have to acknowledge. that all of their takes on GameStop just. being a meme stock. were wrong. And that there is actually a business. here, and that there is value being. created here, and that they missed that, and they got the story completely wrong. And so, to recognize that, and to. recognize your competency as an. executive and as a CEO, and as someone. that can run eBay better than the. installed management makes them wrong.

in their assessment of how the cards. were all laid out on the table. That would be my theory about all this. because everyone got caught up. in the frenzy of. the meme stock craze saying, "Hey, this. is all just. fake. It's not real.". And everyone agreed with that. Once. everyone agrees with it, no one's. allowed to rewrite history. No one can. ever say that they were wrong about. COVID. You can't have everyone say that. they were wrong about GameStop because. it ruins their credibility. To maintain. their credibility, they have to continue. to make you seem less credible. That.

would be my take on it. >> Yeah. Yep. >> So, your next steps, you're going to go. hostile? You're going to do a tender? I mean, how's this going to go? >> I'm going to do whatever we need to do, whatever I need to do in order to. succeed. >> But, you're committed. Clearly. >> yeah. >> If I'm their bankers, I get hired to run. a process and maximize shareholder.

value. Those bankers then try to. negotiate with you, but the truth is if. there's no other bidders, they're just negotiating against. themselves. Is is that fair to say? Like, are there other bidders that could. emerge here. um that could beat this price that. you're offering, that could beat this. offer that you're putting on the table? >> Well, it's a lot of money. It's a big premium. And. uh beauty is in the eye of the beholder. and like it makes sense for me.

to pay this for the business because of. what I could do with the business. Not just short-term in terms of. increasing the earnings, but long-term. in terms of really taking significant. market share in live commerce and digi-. building a digital marketplace for. gaming. That's something an existing. management team would never be able to. build in their wildest dreams. And so, it's worth it for me to do. something like that. And then, you know,

obviously, when it comes to their large. competitors, there's antitrust issues in terms of. them being able to to do a deal of this. size as well. But, um. I don't know why they won't speak to me. They should cuz I'm not going to stop. I'm not going to go away. But, I'm sure. >> another option. Yeah, I mean, people. could come along and buy the shares on. the open market, too, and vote in favor. of your offer. So, I mean, this is what. often happens in these sorts of.

situations historically is. the shareholder base can turn over. And if people like the premium on the. stock today, and they don't want to own GameStop. stock tomorrow, there's probably going. to develop a good market for trading the. shares if the market starts to believe. your story, I would imagine, right? And. so, that might happen here as well. So, look, >> There's a lot of different escalation. paths that um. we have in our toolkit. >> And we'll see them. Are you working with.

bankers? Are you doing this alone? >> Yeah, we're we're working with bankers. and uh high-priced advisors. >> [laughter]. >> Ryan, this has been awesome to get to. know you and hear about your history and. your vision for where you want to take. GameStop and eBay. Really, man, the best. of luck to you in the process, and. thanks for speaking with us. >> I appreciate it. Great speaking to you, Dave. >> [music]. >> I'm going. all in.