In a surprising move, GameStop, the well-known U.S. video game retailer, has made an unsolicited offer to acquire the e-commerce giant eBay for $125 per share in a cash-and-stock deal. This proposal values eBay at approximately $55.5 billion. The offer consists of an even split between cash and shares of GameStop common stock, presenting a notable 20% premium compared to eBay’s closing price of $104.07 on Friday. When considering eBay’s price from February 4—when GameStop began investing in eBay—the premium rises to a striking 46%.
As news of the proposal broke, eBay’s shares saw a significant increase, surging as much as 13.4% in after-hours trading to close around $118. In parallel, GameStop’s stock also experienced an uptick, rising approximately 4% to $27.60.
GameStop’s Chief Executive Ryan Cohen expressed confidence in the potential of the acquisition, envisioning a path to elevate eBay as a major competitor to Amazon. “eBay should be worth — and will be worth — a lot more money,” Cohen was quoted as saying. He stated his ambition of transforming eBay into a company valued in the hundreds of billions.
The gaming retailer has established a roughly 5% stake in eBay and secured a letter of commitment from TD Bank to facilitate up to $20 billion in debt financing for the transaction. GameStop plans to fund the rest of the deal utilizing its cash reserves, which total about $9.4 billion.
However, the proposal is contingent upon the approval from eBay’s board of directors as well as regulators and shareholders from both companies. eBay has yet to respond to inquiries regarding the offer.
Both GameStop and eBay have faced difficulties in adapting to evolving consumer preferences, which raises questions regarding the viability of GameStop as an acquirer of a company whose market capitalization is four times its own. As of Friday, GameStop had a market value of around $12 billion compared to eBay’s estimated $46 billion, according to LSEG data.
Cohen indicated a willingness to take the offer directly to shareholders should eBay’s board not consider GameStop a credible acquirer. If the deal proceeds, Cohen is expected to assume the role of Chief Executive Officer of the merged entity.
GameStop outlined its strategy to cut annual costs by $2 billion within the first year after the acquisition, specifically aiming to streamline eBay’s sales and marketing budget, which stood at $2.4 billion in fiscal 2025 despite stagnant buyer growth. GameStop’s analysis stated that excessive spending has not been yielding new users for a marketplace with such a well-known brand.
Additionally, GameStop promoted its network of approximately 1,600 retail locations across the U.S. as valuable infrastructure for enhancing eBay’s marketplace operations, including areas like authentication, intake, fulfillment, and live commerce.
Cohen first hinted at his acquisition ambitions back in January, indicating a desire to purchase a publicly traded consumer company larger than GameStop, which he believes could be transformative and unprecedented in capital markets history.
