GameStop Proposes $56 Billion Acquisition of eBay

GameStop has proposed an unsolicited acquisition of eBay valued at approximately $56 billion, according to a letter from CEO Ryan Cohen published on the company's website. The offer includes a mix of cash and stock, priced at $125 per eBay share, which represents a premium over eBay's market capitalization of about $46 billion at the time of the announcement.

GameStop's market capitalization was around $12 billion. " To fund the cash portion, GameStop plans to use its $9.4 billion in cash reserves and obtain up to $20 billion in debt financing arranged by TD Securities, according to the letter. The proposal indicates that the stock component would cover the remainder, with GameStop able to issue additional shares as needed.

In a CNBC interview on the day of the announcement, Cohen addressed questions about financing. When asked by anchors Andrew Ross Sorkin and Becky Quick how the company would cover the full amount, Cohen said, "I don’t understand your question. " He added that the deal would allow for "cutting costs and improving operational efficiency at eBay," according to a transcript referenced in coverage by Yahoo Finance.

Cohen confirmed that GameStop had not engaged in prior discussions with eBay about the proposal. eBay issued a statement saying it would "carefully review the unsolicited proposal" and that its board of directors is scheduled to meet this week to discuss it, according to people familiar with the matter cited by Semafor.

eBay declined to provide additional comments until the review is complete. Market reactions included an initial 12% rise in eBay shares, which later returned to pre-announcement levels, while GameStop shares fell more than 10% on the announcement day before rebounding 3% the following day, as reported by The Guardian.

Cohen, who founded the online pet retailer Chewy and sold it to PetSmart for $3.35 billion in 2017, joined GameStop's board in 2021 and became CEO later that year. Under his leadership, GameStop implemented layoffs reducing salaried employees from 11,000 in 2023 to 6,500 by 2025, returned to profitability, and built cash reserves of $9 billion, increasing its market capitalization from $1.3 billion in 2021 to $10.69 billion, according to Fortune.

Cohen owns about 9% of GameStop shares and is eligible for a stock options package worth up to $35 billion if the company's market capitalization reaches $100 billion.

Some analysts and investors have expressed skepticism about the bid's feasibility. An unnamed investor associated with the meme stock movement sold his entire GameStop position following the announcement, stating in a post cited by Semafor that the proposed debt load reminded him of overleveraged companies like Wayfair and Carvana, and that efficiency gains alone would not enable the combined company to compete effectively with Amazon.

Anonymous sources familiar with the matter, as reported by The Guardian, suggested the bid might not be serious and could be a precursor to alternatives like a proxy fight. No publicly released calculations from GameStop have addressed a potential $16 billion shortfall based on current valuations, and the company did not respond to requests for comment on financing details, according to NPR.

eBay's board has not issued a public response beyond the initial statement, and no evidence of prior communications between the companies has been disclosed.

The proposal, if completed, would be one of the largest acquisitions in e-commerce history, exceeding the $3.35 billion Chewy sale. GameStop's letter specifies no conditions related to regulatory approvals or due diligence timelines. The BBC reported the bid value as $55.5 billion, based on the same letter.