GameStop Proposes $55.5B Acquisition of eBay, Promises to Develop a ‘Hundreds of Billions’ Platform
GameStop has initiated a $55.5 billion proposal to acquire eBay, with the goal of revitalizing the struggling marketplace and positioning it as a significant competitor.
GameStop, the US video game retailer, has put forth an unsolicited, non-binding proposal to purchase eBay for $125 per share in a cash-and-stock arrangement, which places the valuation of the online marketplace at around $55.5 billion.
On Sunday, GameStop issued a statement indicating that the proposal, which is divided equally between cash and its common stock, offers a 20 percent premium over eBay’s closing price of $104.07 on Friday and a 46 percent premium compared to its closing price on February 4, when the company started acquiring its stake.
The market response was measured, with eBay shares increasing by as much as 13.4 percent in after-hours trading to approximately $118, yet remaining below the offer price, indicating a level of investor skepticism regarding the deal’s potential. GameStop shares increased by approximately 4 percent, reaching $27.60.
GameStop Chief Executive Ryan Cohen expressed optimism regarding the acquisition, suggesting it will enhance eBay’s competitiveness against Amazon.com.
“EBay is undervalued and will undoubtedly reach a much higher valuation,” Cohen stated. “I am contemplating transforming eBay into an entity valued at hundreds of billions of dollars.”
GameStop announced that it has acquired approximately a 5 percent stake in eBay and obtained a commitment letter from TD Bank for up to $20 billion in debt financing, with the balance to be covered by its $9.4 billion cash reserves.
The proposal is contingent upon receiving approval from eBay’s board, regulators, and the shareholders of both companies. eBay has yet to provide a response to requests for comment.
The bold proposal has sparked worries regarding its feasibility, considering the significant difference in scale between the two firms. Before the announcement, GameStop’s market capitalization was approximately $11–12 billion, while eBay’s valuation was around $46 billion.
Both companies have encountered difficulties in adjusting to changing consumer preferences, and it is still unclear if eBay’s board will consider GameStop a legitimate acquirer, especially given the contrasting market capitalizations and the challenges both firms face in adapting to these shifts.
Cohen, however, indicated his readiness to intensify the process if needed.
“Huge” ambitions
“I’m considering transforming eBay into an entity valued at hundreds of billions of dollars,” Cohen emphasized, further stating in previous comments: “It’s going to be truly significant.” Huge. Huge.
He mentioned to the Wall Street Journal that he would contemplate presenting the offer directly to shareholders via a proxy fight if necessary. If successful, Cohen is anticipated to assume the role of chief executive of the merged entity.
Cohen initially suggested this possibility in January, characterizing a potential acquisition as “transformational” and “unprecedented in the history of the capital markets.”
In its proposal, GameStop stated its goal to reduce annual costs by $2 billion within a year, focusing on eBay’s sales and marketing expenses, which amounted to $2.4 billion in fiscal 2025, despite limited growth in buyers.
“Increased spending is not resulting in more users on a marketplace that enjoys nearly universal brand recognition,” the company stated.
GameStop estimated that these cost reductions might increase eBay’s earnings per share from $4.26 to $7.79 in the first year.
The company has also detailed its plans to utilize its 1,600 U.S. retail stores as a physical foundation for eBay’s marketplace, enhancing authentication, fulfillment, and live commerce operations.
Cohen, a Canadian entrepreneur, built his reputation as the founder of Chewy, which PetSmart acquired for $3.35 billion in 2017.
He subsequently emerged as a pivotal figure in GameStop’s evolution, joining its board in January 2021 amidst the “meme stock” trading frenzy driven by retail investors on Reddit. He took on the role of CEO in September 2023, spearheading a turnaround that emphasized cost reduction and the closure of stores.
eBay has faced challenges in maintaining its competitive edge against rivals such as Amazon and emerging specialized resale platforms. Following a peak of $100 billion in gross merchandise volume in 2020, the GMV fell to $79.6 billion by 2025, indicating difficulties in maintaining active buyers.
The proposed takeover now paves the way for a critical confrontation that has the potential to transform both companies — provided it navigates substantial financial and regulatory challenges, which include securing necessary approvals from government agencies and addressing potential antitrust concerns.
