BY COMFORT OGBONNA
GameStop announced on Sunday that it has proposed acquiring eBay Inc. in a deal valued at approximately $56 billion, marking one of the most ambitious takeover attempts in recent corporate history. The proposed transaction would combine the struggling video game retailer with one of the world’s largest online marketplaces in a move that GameStop CEO Ryan Cohen believes could create a major competitor to Amazon.
According to a letter sent to eBay’s board, GameStop is offering $125 per share in a combination of cash and stock, split evenly between the two. Based on eBay’s closing share price on Friday, the offer represents a premium of roughly 20% for shareholders.
The proposal is especially notable because eBay’s market value is nearly four times larger than GameStop’s, making the bid an unusually aggressive move for the Texas-based retailer. Corporate takeovers of this scale are rare, particularly when the acquiring company is significantly smaller than the target.
Cohen revealed that GameStop has already quietly built a 5% stake in eBay through a mix of shares and derivatives. He said the investment reflects his confidence in eBay’s long-term value and the opportunities he sees in combining the two companies.
The offer was first reported by The Wall Street Journal following an interview with Cohen, who also serves as GameStop’s largest individual investor. In the interview, Cohen argued that bringing GameStop and eBay together would create major opportunities to improve profitability, streamline operations, and expand both companies’ reach in e-commerce.
“It could be a legit competitor to Amazon,” Cohen said while discussing the future potential of the combined company.
Cohen stated in his letter that GameStop believes it can eliminate roughly $2 billion in annual costs within the first year after the deal closes. He argued that those savings would significantly improve earnings and help reposition the business as a stronger technology-driven retail platform.
A major part of Cohen’s strategy involves using GameStop’s nationwide physical footprint to strengthen eBay’s operations. The company currently operates around 1,600 locations across the United States, which Cohen said could be transformed into hubs for product authentication, shipping, order fulfillment, customer intake, and live-commerce events.
He also signaled that he is prepared to take the fight directly to shareholders if eBay’s board rejects the proposal. Cohen reportedly told The Wall Street Journal that he would consider launching a proxy battle to pressure the company into negotiations.
eBay has not publicly responded to the offer and did not immediately comment on requests for reaction.
Cohen expressed confidence that eBay’s true value is much higher than its current market capitalization, saying he believes the company could eventually become worth “hundreds of billions of dollars” if managed differently and paired with GameStop’s infrastructure and customer base.
The entrepreneur has developed a strong following among retail investors since becoming one of the central figures of the 2021 meme-stock phenomenon. Often referred to by online traders as the “meme king,” Cohen gained prominence during the massive surge in GameStop shares driven by individual investors battling hedge funds that had heavily shorted the stock.
Under Cohen’s leadership, GameStop has attempted to reinvent itself after years of decline caused by the shift toward digital game downloads and online shopping. He joined the company’s board in January 2021 before eventually becoming CEO, implementing aggressive cost-cutting measures that helped return the retailer to profitability.
Despite those efforts, GameStop continues to face serious challenges as the gaming industry increasingly moves away from physical retail. The company recently reported a 14% decline in fourth-quarter revenue, highlighting ongoing pressure on its traditional business model.
By contrast, eBay has shown more stable performance in recent quarters. Founded in 1995 by entrepreneur Pierre Omidyar, the online marketplace has benefited from growing demand for collectibles, automotive accessories, and live-streamed shopping experiences. Last week, eBay projected second-quarter revenue above Wall Street expectations, signaling stronger consumer activity on its platform.
To finance the proposed acquisition, Cohen said GameStop has secured financial backing that includes a commitment letter for approximately $20 billion in debt financing from TD Securities, a subsidiary of TD Bank. He added that GameStop also plans to use part of its existing cash reserves, which totaled around $9.4 billion in cash and liquid investments as of January 31.
Additional funding could come from third-party investors, including sovereign wealth funds from the Middle East, according to reports. Cohen said he expects a combination of debt, outside investment, and stock issuance to support the transaction.
If the acquisition succeeds, Cohen said he intends to serve as chief executive officer of the merged company. He believes the combined business could become a dominant force in online commerce by merging eBay’s digital marketplace expertise with GameStop’s retail presence and loyal customer community.
Investors and analysts are expected to closely monitor the situation in the coming days, as the proposed deal could reshape both companies and potentially disrupt the broader e-commerce industry.