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GameStop has made an unsolicited $55.5 billion offer to buy eBay in a surprise move that would bring together the video game retailer behind the 2021 meme stock frenzy and one of the oldest names in online resale.
The offer values eBay at $125 a share and would be paid half in cash and half in GameStop stock, according to the company’s announcement on Sunday evening.
The price represents a 46% premium to eBay’s closing share price on Feb. 4, the day GameStop began building its position in the company, the Financial Times reported.
GameStop has already built a 5% stake in eBay. Its chief executive, Ryan Cohen, told eBay’s board that a merger could cut costs, increase earnings and give the online marketplace access to GameStop’s U.S. store network.
Cohen said GameStop’s roughly 1,600 stores across the United States could provide eBay with “a national network for authentication, intake, fulfilment and live commerce.”
Under the proposed deal, Cohen would become chief executive of the combined company. According to a BBC report, GameStop said "he would receive no salary, no cash bonuses, and no golden parachute” and would be paid only according to the performance of the merged business.
Cohen said he was ready to take the offer directly to shareholders if eBay’s board rejects the approach. He also said he would launch a proxy fight.
GameStop said it had secured a commitment letter from TD Bank, for around $20 billion in debt financing to support the transaction.
The proposal would join two companies with very different recent histories. GameStop, once the world’s largest video game retailer, struggled as more gaming and retail activity moved online. Its valuation then surged in 2021 when retail traders bought the stock heavily during the meme stock boom, forcing losses on short sellers who had bet against the company.
Although GameStop’s market value has fallen from its 2021 peak, it remains far above its level before the meme stock surge. As of Friday, GameStop was worth about $11.9 billion, while eBay was valued at around $46 billion.
Cohen, who became GameStop's chief executive in 2023, has criticized the company’s slow move into e-commerce. The eBay offer appears to suggest he is seeking a far-larger digital platform rather than relying only on a turnaround of GameStop’s core retail business.
Cohen told eBay that he planned to deliver $2 billion in cost savings within a year of the deal closing.
Most of those cuts would come from eBay’s sales and marketing division, where GameStop said spending had not produced enough user growth for a platform with near universal name recognition.
The bid has already drawn skepticism. Sucharita Kodali, a retail industry analyst at Forrester, told the BBC that the proposal did not sound like a “terribly good offer,” partly because it would leave eBay carrying GameStop’s debt.
“It makes sense for GameStop because it could lift its valuation by being linked with a larger company like eBay,” Kodali said, adding: “The truth is, we are not necessarily putting two strong companies together.”
eBay shares rose more than 13% in after-hours trading when news of the potential offer emerged on Friday, while GameStop shares gained around 4%.
eBay, launched in 1995 as a marketplace for hobbyists, now has 136 million users.
Once a symbol of the dotcom era, the company has faced pressure from Amazon and newer resale platforms such as Depop and Vinted as consumer habits have shifted.
Under Chief Executive Jamie Iannone, a former Walmart executive, eBay has focused on areas such as collectibles and enthusiast-led categories.
Last week, the company said gross merchandise volume, the total value of paid transactions on its platform, rose 18% in the first quarter to $22.2 billion. Iannone described eBay as a “marketplace of choice for enthusiasts.”
eBay’s profit rose to $512 million in the quarter, up from $499 million a year earlier. GameStop is expected to report results in early June.
Earlier this year, eBay said it planned to buy Depop from Etsy for around $1.2 billion.
The second-hand fashion platform is popular with Gen Z and young millennial shoppers, and eBay plans to cross-list Depop sellers’ items on its own marketplace as part of efforts to expand its market share.
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