GameStop Offers $56 Billion to Acquire eBay

GameStop announced an unsolicited offer to acquire eBay for $56 billion, proposing a mix of cash and stock at $125 per share. The bid represents a 46 percent premium over eBay's closing price on February 4, when GameStop began accumulating a 5 percent stake in the company.

eBay confirmed receiving the proposal without prior discussions and stated its board would evaluate it for shareholder value. GameStop Chairman and CEO Ryan Cohen detailed the plan in a letter to eBay Chairman Paul Pressler, emphasizing potential synergies from integrating GameStop's 1,600 U.S. locations for authentication, fulfillment, and live commerce.

The proposal envisions GameStop stores serving as drop-off nodes and broadcasting studios to enhance eBay's operations without additional capital expenditure. Cohen intends to lead the combined company if the deal closes.

GameStop reported holding $9.4 billion in cash and liquid investments as of January 31, planning to fund the cash portion through its balance sheet and third-party financing. The company secured a highly confident letter from TD Securities for up to $20 billion in debt.

However, the offer's structure—half cash, half stock—has drawn scrutiny over a potential $16 billion funding gap based on GameStop's $11 billion market capitalization. During a CNBC interview, Cohen addressed financing questions but did not fully clarify the math when pressed by co-anchor Andrew Ross Sorkin.

Cohen noted GameStop's ability to issue stock to complete the deal. Skeptics, including Morgan Stanley analysts, highlighted the fundamental differences in business models, with eBay as a third-party marketplace and GameStop as an in-store wholesaler.

“I don’t understand your question. We’re offering half cash, half stock, and we have the ability to issue stock in order to get the deal done.”

GameStop proposed slashing eBay's expenses, including $1.2 billion from sales and marketing, arguing that eBay's $2.4 billion spend in fiscal 2025 added only 1 million net active buyers, from 134 million to 135 million. Additional cuts of $300 million in product development and $500 million in general and administrative costs were outlined, with consolidation in finance, HR, and other functions post-merger.

The company claimed eBay has underperformed and spends excessively on marketing despite near-universal brand recognition. By leveraging GameStop's focus on collectibles and physical infrastructure, the combined entity could accelerate revenue growth and compete more effectively against rivals like Amazon.

Ryan Cohen, with an estimated net worth of $5 billion, founded online pet retailer Chewy, which he sold to PetSmart for $3.35 billion in 2017 after being rejected by 100 investors. Chewy grew to 9,000 employees and seven massive warehouses, emphasizing customer service like handwritten cards and pet portraits.

It separated from PetSmart in 2020 and now has a $10 billion market cap as a public company. Cohen joined GameStop's board in January 2021 and became CEO in 2023, overseeing a pivot to e-commerce and collectibles. Under his leadership, GameStop reduced salaried employees from 11,000 in 2023 to 6,500 in 2025 through layoffs and closed about 470 U.S. stores in early 2026, following 590 closures in 2024.

The company amassed $9 billion in cash reserves and returned to profitability, posting $418 million in net income for fiscal 2025 compared to a $381 million loss in 2021.

Following the announcement, GameStop's stock fell about 2 percent, while eBay's rose 5 percent. GameStop's market cap stands at $10.69 billion, up from $1.3 billion in 2021, but its Q4 2026 net sales dropped to $1.1 billion from $1.28 billion the prior year, with net income slightly down to $127.9 million.

eBay reported Q1 2026 revenue of $3.1 billion, up 19 percent year-over-year, and GAAP net income of $512 million, up 2 percent. GameStop's net sales for fiscal 2025 were $3.6 billion, down from $6 billion in 2021.

Cohen owns about 9 percent of GameStop's shares and receives no salary or bonuses, with compensation tied to performance. The board promised him $35 billion in stock options if he increases the market cap to $100 billion. Analysts noted the deal could surpass the $55 billion Electronic Arts transaction as the largest leveraged buyout.

GameStop's history includes meme-stock frenzy in the early 2020s, with Cohen's RC Ventures profiting from investments like a 10 percent stake in Bed Bath & Beyond sold for a $68 million gain in 2022. Cohen described the bid as a bet on revival, potentially genius or foolish, drawing from his father's lessons in discipline and support.

Born in Montreal, Cohen never attended college and built Chewy by emulating that discipline, starting with three employees and overcoming investor skepticism about competing with Amazon.