Ryan Cohen once promised investors he would make an acquisition that would either be “genius or totally, totally foolish.” On Sunday evening, the world found out what he had in mind.
GameStop just made a $55.5 billion unsolicited bid to buy eBay. And nothing about it is small.
What GameStop is proposing
GameStop submitted a non-binding proposal to acquire 100% of eBay at $125 per share in a cash-and-stock transaction, according to a GameStop. The offer is structured as 50% cash and 50% GameStop stock, with eBay shareholders able to elect their preferred mix subject to pro-rata allocation.
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The $125 price represents a 20% premium to eBay’s Friday closing price of $104.07, according to CNBC. It also represents a 46% premium to eBay’s unaffected closing price on February 4, the day GameStop began quietly building its position in the company, CNBC noted.
Cohen told the Wall Street Journal he is prepared to go directly to eBay shareholders if the board does not engage. “eBay should be worth — and will be worth — a lot more money,” he said
The financing behind the bid
GameStop holds approximately $9.4 billion in cash. To bridge the gap on a $55.5 billion deal, the company has secured a “highly confident” letter from TD Securities for up to $20 billion in debt financing. GameStop also said it plans to file a Schedule 13D and make an HSR antitrust filing on Monday.
Even so, the math is tight. GameStop’s market cap is roughly one-quarter of eBay’s value. The stock component of the offer will require shareholder approval and could dilute existing GameStop holders significantly. And the debt load from $20 billion in financing would fundamentally reshape GameStop’s balance sheet post-close.
Cohen pledged $2 billion in annual cost savings within 12 months of closing, which he will need to demonstrate to convince eBay’s board and shareholders that the combined business creates more value than eBay can generate independently.
Why Cohen wants eBay specifically
Cohen’s stated logic is that eBay could transform GameStop from a declining game retailer into a scaled commerce platform. He has discussed using GameStop’s physical stores as collection and authentication points for marketplace transactions, giving the combined company a unique role in the broader resale economy, according to CNBC.
He also told the Wall Street Journal there is no one more qualified to run eBay than himself, citing his experience building Chewy into a multi-billion dollar business before selling it to PetSmart. Cohen has said his ambition for GameStop is to reach a $100 billion valuation. Acquiring eBay would be the most direct path to that target.
GameStop has already been quietly building its eBay stake. The company now holds approximately 5% of eBay’s shares, a position it began accumulating on February 4, according to Sherwood News.
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How the market reacted
Markets responded immediately. eBay shares surged nearly 12% in after-hours trading after the news broke. GameStop rose approximately 4%, according to Sherwood News.
The reaction shows the market is taking the bid seriously. A 12% jump in eBay’s after-hours price also complicates the economics. As eBay’s stock rises toward the $125 offer price, the effective premium shrinks, which changes how eBay’s board calculates whether the deal is attractive enough to engage on.
Key figures from GameStop’s eBay proposal:
- Offer price: $125 per share, 50% cash and 50% GameStop stock, with shareholder election rights, according to the GameStop
- Premium to eBay’s unaffected February 4 closing price: 46%, according to CNBC
- GameStop’s existing eBay stake: approximately 5%, accumulated since February 4, according to Sherwood News
- GameStop cash on hand: approximately $9.4 billion, according to Bloomberg
- TD Securities financing commitment: up to $20 billion, described as a “highly confident” letter, Bloomberg confirmed
- Promised annual cost savings post-close: $2 billion within 12 months, Bloomberg noted
- Cohen’s stated valuation ambition for GameStop: $100 billion, according to Benzinga
What eBay’s board must now decide
eBay’s board faces a genuinely difficult decision. The 46% premium to the unaffected price is hard to dismiss outright. But accepting GameStop stock as half the consideration is a significant ask. It means eBay shareholders would become major holders of a company whose market cap is a fraction of eBay’s own, led by a CEO whose biggest previous achievement was an online pet retailer.
eBay is not a distressed company. It has structural strengths in collectibles, resale, and direct-to-consumer commerce that it has been investing to grow. The board will need to decide whether a $55.5 billion exit now is more valuable than the independent path it has been on.
If eBay declines to engage, Cohen has said he will take the case directly to shareholders. That sets up a potential proxy fight that could drag on for months and keep both stocks in play for an extended period. Whatever eBay’s board decides in the coming days, this story is far from over.
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