GameStop has made an unsolicited bid to acquire eBay for $125 per share, multiple media reports said, in a deal that would value the online marketplace at approximately $56 billion and reshape the fast-moving retail sector, though eBay’s board has not officially commented on the offer.
The offer represents a 20% premium over eBay’s recent trading price, according to people familiar with the matter, and at $125 a share values eBay at roughly $56 billion, a sum that towers over GameStop’s own market capitalization of about $12 billion and raises immediate questions about how the deal would be financed, while eBay, once a dot-com icon, has struggled to match the growth of larger rivals such as Amazon and Walmart but retains a vast global user base and a trusted brand in secondhand goods.
The Wall Street Journal reported that GameStop has been building a stake in eBay since February, accumulating about 5% of the company’s shares, a position worth more than $2 billion that would give it a strong voice in any shareholder vote and signals a long-term strategic interest in e-commerce that goes beyond its struggling physical retail operations; the purchases, acquired discreetly, reflect CEO Ryan Cohen’s conviction that combining GameStop’s turnaround story with eBay’s platform could create a powerful alternative to Amazon, the Journal added.
Ryan Cohen, GameStop’s CEO and founder of online pet retailer Chewy, is described by multiple people familiar with the matter as the architect of the bid, drawing on his activist background to push GameStop’s digital overhaul since joining the board in 2020, and since becoming CEO in 2023 he has aggressively cut costs and shuttered unprofitable stores, betting that an eBay merger can transform the company from a video game retailer into a multifaceted e-commerce player, those people said.
The Wall Street Journal reported, citing a regulatory filing, that Cohen will receive no salary, cash bonuses, or golden parachute, tying his compensation exclusively to the combined company’s performance, a move analysts interpreted as a signal of his long-term commitment and a way to align his interests with shareholders.
GameStop expects to achieve $2 billion in cost savings in the first year after a merger by eliminating overlapping corporate functions, streamlining logistics, and consolidating vendor relationships, according to people briefed on the plans, though the company has not publicly detailed the sources or disclosed any revenue synergies, leaving many analysts skeptical that simple cost cutting alone can generate sustainable growth without a clear expansion strategy.
The financing structure is already a point of debate: Bloomberg reported that the acquisition would be financed with equal parts cash and GameStop shares, but The Financial Times said TD Securities has committed to provide $20 billion in debt financing, implying a far larger loan component; with GameStop’s balance sheet showing only $4 billion in cash at its most recent quarter-end, a cash-heavy deal would require significant additional capital, and heavy reliance on debt could trigger over $1 billion in annual interest, eroding a substantial portion of the projected savings and adding financial risk to the ambitious plan.
Cohen’s strategy is to blend GameStop’s network of about 1,600 physical outlets in the U.S., as disclosed in its latest annual report, with eBay’s sprawling digital platform to build a direct competitor to Amazon, several people familiar with the matter said, and he has publicly criticized Amazon for what he called sluggish e-commerce adoption, according to City AM, seeing the merger as a way to leapfrog the retail giant by uniting physical and digital retail under one umbrella.
Shares of GameStop rose more than 6% on Friday before news of the bid became public, TradingView data showed, while eBay’s stock surged approximately 10% in pre-market trading after reports emerged, FactSet data showed, though analysts cautioned that GameStop’s meme-stock status adds significant volatility from retail investors on Reddit, making sharp swings that could jeopardize a stock-based bid, and eBay’s jump reflects both a control premium and long-term integration uncertainty.
Antitrust scrutiny is expected in both the United States and the European Union, The Wall Street Journal reported, with the core concern that a combined GameStop-eBay could exert too much control over pricing and availability in the pre-owned goods market, potentially squeezing independent sellers who rely on eBay for large-scale distribution; the Journal noted that previous retail mergers were blocked on similar grounds, suggesting the companies would likely need to offer significant concessions to win approval, potentially prolonging the deal’s closing by a year or more.
If eBay’s board rejects the bid, Cohen is prepared to take the offer directly to shareholders in a hostile campaign, City AM reported, though acceptance is far from certain given eBay’s standalone strength and improving margins, and even with shareholder support, formidable antitrust hurdles remain, forcing eBay’s management to mount a fierce defense to justify its independence, a test of Cohen’s activist playbook on an unprecedented scale, analysts say.