- GameStop (NYSE:GME) proposed a non‑binding US$125‑per‑share cash‑and‑stock acquisition of eBay (NASDAQ:EBAY), valuing the company at about US$55.5 billion and representing large premiums to recent trading prices
- GameStop has accumulated a 5 per cent economic stake in eBay and plans up to US$2 billion in annualized cost cuts within a year, which it says could materially boost eBay’s earnings
- The deal would be financed with GameStop’s cash and new debt, and Ryan Cohen would become CEO of the combined company following closing
- GameStop stock (NYSE:GME) opened trading at US$25.11
GameStop (NYSE:GME) has submitted a non-binding proposal to acquire 100 per cent of eBay Inc. (NASDAQ:EBAY) in a transaction valued at approximately US$55.5 billion, marking one of the most ambitious strategic moves in the U.S. consumer internet and retail sectors in recent years.
Under the proposal detailed in a Monday morning news release, eBay shareholders would receive US$125.00 per share, split evenly between cash and GameStop common stock. The offer represents a 46 per cent premium to eBay’s unaffected closing price on February 4, 2026—the day GameStop began accumulating its position in the online marketplace operator. GameStop expects to file a Schedule 13D and submit a Hart‑Scott‑Rodino notification on Tuesday.
GameStop has built a roughly 5 per cent economic interest in eBay, combining derivatives exposure with beneficial ownership of common stock. Based on eBay’s most recently disclosed undiluted share count, the proposal implies an aggregate undiluted equity value of about US$55.5 billion. The offer also reflects a 27 per cent premium to eBay’s 30‑day volume‑weighted average price and a 36 per cent premium to its 90‑day VWAP.
The consideration structure allows full shareholder election rights, enabling eBay shareholders to choose cash, stock, or a combination, subject to pro‑rata allocation. The transaction would be conditioned on customary closing conditions, including regulatory approvals and definitive financing.
Financing and balance sheet capacity
GameStop said the cash portion of the deal would be funded through a combination of existing liquidity and third‑party financing. As of January 31, 2026, the company reported approximately US$9.4 billion in cash and liquid investments on its balance sheet. In addition, GameStop has received what it described as a “highly confident” letter from TD Securities for up to US$20 billion in acquisition financing.
Company representatives emphasized that the proposed capital structure is intended to preserve balance‑sheet flexibility while giving eBay shareholders exposure to the combined company’s long‑term value creation strategy.
Cost structure and business rationale
GameStop’s proposal outlines a plan to deliver approximately US$2 billion in annualized cost reductions within 12 months of closing, with a primary focus on eBay’s operating expense base.
In fiscal 2025, eBay spent roughly US$2.4 billion on sales and marketing while adding about one million net active buyers, increasing total active buyers from 134 million to 135 million—a net gain of less than 0.75 per cent. GameStop estimates that approximately US$1.2 billion of savings could be achieved by rationalizing sales and marketing spending, arguing that incremental advertising is no longer producing commensurate user growth for a marketplace with global brand recognition.
Additional cost savings are expected to include about US$300 million from product development, where expenses grew 11 per cent in fiscal 2025 against revenue growth of 8 per cent, and approximately US$500 million from general and administrative functions. The G&A savings would be driven by consolidation across finance, human resources, real estate, legal, information technology, and professional services in the combined organization.
Based solely on these cost reductions, GameStop estimates that eBay’s diluted GAAP earnings per share from continuing operations would increase from US$4.26 to US$7.79 in the first year following the transaction, before factoring in any revenue synergies.
Physical footprint and omnichannel integration
Beyond cost efficiencies, the proposal highlights strategic use of GameStop’s physical retail footprint. With approximately 1,600 U.S. retail locations, GameStop envisions creating a national network to support authentication, intake, fulfillment, and live commerce capabilities for eBay sellers and buyers.
The company argues that this infrastructure could shorten shipping times, reduce fraud, and enhance trust in high‑value categories such as collectibles, electronics, and luxury goods—areas where authentication and condition verification are increasingly important.
Leadership and governance
If the transaction is completed, Ryan Cohen would serve as chief executive officer of the combined company. Cohen has led GameStop since January 2021, a period during which the company shifted from a net loss of US$381 million in fiscal 2021 to net income of US$418 million in fiscal 2025. Over that time, GameStop reduced SG&A expenses by approximately US$800 million, or 47 per cent, retired its legacy debt, and raised US$4.2 billion of long‑term debt.
Cohen owns approximately 9 per cent of GameStop and receives no salary, cash bonuses, or golden parachute. According to the proposal, his compensation would be entirely performance‑based and tied to the results of the combined company.
Make an offer for one well-used online auction platform
The proposal is non‑binding, and there is no assurance that eBay’s board will enter into negotiations or that a definitive agreement will be reached. Still, the approach underscores GameStop’s intention to reposition itself as a broader commerce and technology platform, leveraging both digital scale and physical infrastructure.
Market participants are expected to scrutinize the proposal closely, weighing the execution risks of a transaction of this scale against the potential for cost efficiencies and operational transformation in one of the world’s largest online marketplaces.
About GameStop Corp.
GameStop Corp. is a U.S. video game, consumer electronics and services retailer. The company operates across the United States. It sells new and second-hand video game hardware, physical and digital video game software, and video game accessories.
GameStop stock (NYSE:GME) opened lower at US$25.11 and has fallen 5.45 per cent since this time last year, but has risen 25 per cent since the year began.
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