A sign is posted in front of eBay’s headquarters in San Jose, California.
Justin Sullivan | Getty Images
US video game retailer game stop On Sunday, it announced that it had made an unsolicited, non-binding takeover offer. eBay The acquisition is for $125 per share in a cash and stock transaction, valuing the e-commerce platform at approximately $55.5 billion.
The offer, split equally between cash and GameStop common stock, represents a 20% premium to eBay’s Friday closing price of $104.07 and a 46% premium to its closing price on Feb. 4, when the gaming retail giant began acquiring stakes in the company, GameStop said in a statement.
eBay’s stock price soared as much as 13.4% in after-hours trading to about $118, well below GameStop’s asking price of $125, suggesting investors are skeptical the deal will go through.
GameStop, which became a so-called “meme stock” after the 2021 retail frenzy sent its stock price soaring, rose about 4% to $27.6 a share.
The announcement comes as GameStop CEO Ryan Cohen told the Wall Street Journal that he sees a path to making the e-commerce company a bigger competitor. Amazon.com.
eBay
“EBay should be worth more than that – and always will be,” Cohen said. “I’m thinking of turning eBay into something worth hundreds of billions of dollars.”
GameStop acquired a roughly 5% stake in eBay and secured up to $20 billion in debt financing commitments from TD Bank to enable the transaction, according to a statement. The remainder of the deal will be financed from a cash pile of approximately $9.4 billion.
The proposal must be approved by eBay’s board of directors, regulators and shareholders of both companies. EBay did not immediately respond to CNBC’s request for comment.
bold bid
Both companies have struggled to adapt to changing consumer tastes, and it remains unclear whether eBay’s board would view GameStop (which had a market capitalization of about $11 billion before the news broke) as a credible acquirer for a company four times its size.
GameStop’s market capitalization was $12 billion as of Friday, while eBay’s market cap was much larger at about $46 billion, according to LSEG data, raising questions about the feasibility of the bid.
Mr. Cohen told the Journal that he was prepared to take offers directly to shareholders in a proxy fight if necessary. If the deal is completed, Mr. Cohen will become CEO of the combined company, according to a statement from GameStop.
Cohen first hinted at plans to acquire a publicly traded consumer company larger than GameStop in January, telling CNBC at the time that the deal was “transformative” and “has never been done before in the history of capital markets.”
“It’s going to be really big. It’s going to be really big. Very, very, very big,” Cohen said of the size of the deal.
The Canadian entrepreneur made his name by founding Chewy, an online retailer of pet products that was sold to PetSmart in 2017 for $3.35 billion. It then acquired a huge stake in GameStop and gained a cult following, but in late 2020 it criticized the company for moving too slowly into e-commerce and argued that the video-famous retailer could regain its status as the Amazon of gaming.
He joined GameStop’s board in January 2021, just as retail traders on Reddit’s WallStreetBets forum rallied behind the stock, sending it up 1,500% in two weeks in one of the most chaotic episodes in modern markets.
Cohen took over as CEO in September 2023 and returned the company to profitability through aggressive cost-cutting and closing hundreds of stores.
GameStop said in its proposal that it would target eBay’s ballooning sales and marketing budget, which will total $2.4 billion in fiscal 2025, and reduce annual costs by $2 billion within a year, while net active buyer growth remains flat at less than 0.75%.
“Increased spending does not create more users in a marketplace where the brand is nearly universally recognized,” the statement said.
The company predicted that cost savings alone would boost eBay’s earnings per share, measured under standard U.S. accounting rules, to $7.79 from $4.26 in the first year.
GameStop also marketed its approximately 1,600 U.S. retail stores as the physical infrastructure for the eBay marketplace, providing a network of authentication, ingestion, fulfillment, and live commerce capabilities.
Mr. Cohen’s compensation package, which was adjusted at the beginning of the year, also provided further incentive to increase the company’s market value and profitability.
In January, GameStop outlined Cohen’s compensation package, which consists of stock options tied to performance targets such as market capitalization and earnings metrics. Based on this structure, the options could be worth more than $35 billion if the company reaches a valuation of $100 billion and meets its profit goals.
Meanwhile, eBay has spent years losing ground to Amazon and a new generation of specialized second-hand goods markets. eBay’s gross merchandise value peaked at $100 billion in 2020, then fell to $79.6 billion in 2025 as the platform struggled to retain buyers.
