GameStop has proposed to acquire eBay Inc. for approximately $56 billion in a cash-and-stock deal. CEO Ryan Cohen stated that he will take the offer directly to shareholders if eBay’s board does not respond favorably. This development signals a bold move in the global e-commerce and gaming retail sectors.
Notably, GameStop has offered $125 per share in a 50-50 mix of cash and stock, which represents a premium of about 20% based on eBay’s Friday closing price. Meanwhile, eBay’s market capitalization stands nearly four times larger than GameStop’s, making this acquisition attempt highly ambitious and unconventional in the mergers and acquisitions landscape.
Furthermore, Cohen revealed in a letter to eBay’s board that GameStop has already secured a 5% stake in eBay through shares and derivatives. According to a report, which first covered the unsolicited bid, Cohen aims to significantly enhance GameStop’s valuation by leveraging synergies between the two companies.
In addition, Cohen emphasized that combining eBay and GameStop would unlock major opportunities to increase earnings and streamline operations. “It could be a legit competitor to Amazon,” Cohen said about eBay. He also projected that GameStop could reduce eBay’s annualized costs by $2 billion within 12 months of closing, thereby boosting earnings per share.
Moreover, Cohen highlighted that GameStop’s 1,600 U.S. stores could function as a nationwide infrastructure for authentication, intake, fulfillment, and live commerce, strengthening eBay’s operational capabilities. He further stated that he remains ready to initiate a proxy fight if eBay’s board does not engage with the proposal.
However, eBay has not yet responded to requests for comment regarding the offer. Despite this, Cohen reiterated his long-term vision, stating, “eBay should be worth—and will be worth—a lot more money.” He added, “I’m thinking about turning eBay into something worth hundreds of billions of dollars.”
Cohen, widely recognized as a key figure during the 2021 meme-stock frenzy, has built a reputation for making bold and unconventional investment decisions that influence market dynamics. Consequently, this proposed deal could disrupt traditional M&A strategies, as companies rarely attempt to acquire targets significantly larger than themselves without relying heavily on debt or equity financing.
To support the transaction, Cohen has already arranged financial backing, including a commitment letter for approximately $20 billion in debt from TD Bank. Additionally, he may seek further investment from external sources such as Middle Eastern sovereign wealth funds, according to the report.
If the deal materializes, Cohen confirmed that he will serve as CEO of the combined entity. He joined GameStop’s board in January 2021 and later assumed the CEO role, where he implemented aggressive cost-cutting measures that restored profitability.
Historically, GameStop gained global attention during the meme-stock rally when retail investors drove its stock price up by more than 1,700%. Nevertheless, the company continues to face structural challenges as the gaming industry shifts toward digital downloads and online platforms. Recently, GameStop reported a 14% decline in fourth-quarter revenue.
In contrast, eBay, founded in 1995 by Pierre Omidyar, has demonstrated resilience by forecasting second-quarter revenue above Wall Street expectations. The company has benefited from strong demand for collectibles, motor accessories, and live-streamed auctions.
As of Friday’s close, GameStop’s market valuation stood at nearly $12 billion, while eBay’s market value reached approximately $46 billion. Additionally, their shares have risen by 32.1% and 19.5%, respectively, this year, reflecting continued investor interest in both companies.
GameStop’s proposed acquisition of eBay marks a potentially transformative moment in the global e-commerce and retail industry. While the deal faces significant financial and strategic hurdles, it underscores Ryan Cohen’s aggressive growth strategy and ambition to position the combined entity as a formidable competitor to Amazon. If successful, the transaction could redefine industry dynamics, accelerate digital commerce innovation, and reshape the future of online marketplaces.
