GameStop Makes $56 Billion Bid for eBay

CNBC reported Sunday that GameStop has launched a $56 billion unsolicited bid for eBay, proposing $125 per share in a half-cash, half-stock deal. GameStop CEO Ryan Cohen framed the move as an effort to transform eBay into a direct competitor to Amazon.

A Premium Offer That Moved Markets

The proposed price represents a 20% premium to eBay’s most recent closing price of $104.07. It also sits roughly 46% above where eBay traded on February 4, the date GameStop began quietly accumulating a stake in the company. eBay shares surged more than 13% in after-hours trading, touching around $118. GameStop stock climbed approximately 4% to near $27.60 per share.

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How GameStop Plans to Fund the Deal

GameStop holds roughly $9.4 billion in cash on its balance sheet. To bridge the gap, the company secured a commitment letter from TD Bank for up to $20 billion in debt financing. GameStop currently holds a roughly 5% stake in eBay, built ahead of the formal offer. The proposal remains non-binding and requires approval from eBay’s board, regulators, and shareholders from both companies. Cohen told the Wall Street Journal he is willing to pursue a proxy fight if eBay’s board resists the approach.

Also Read: GameStop’s Cash Pile and Its Long Search for a Deal

Background: A Meme Stock Looking for a Second Act

GameStop became a cultural flashpoint in early 2021 when retail investors on social media platforms drove its share price to extraordinary heights. Cohen, who built pet e-commerce company Chewy before selling it, took over as chairman and later CEO. He has since steered the company away from its traditional bricks-and-mortar video game retail roots. In January, Cohen publicly signaled plans to acquire a publicly listed consumer company larger than GameStop, describing the intended deal as “transformational.” The eBay approach is the first formal materialisation of that ambition.

A Size Gap and Many Open Questions

GameStop’s market capitalisation stood near $11 billion before Sunday’s announcement. EBay’s was roughly $46 billion, making this a rare case of a smaller company pursuing a much larger one. GameStop argues its approximately 1,600 U.S. stores could serve as physical infrastructure for eBay’s marketplace, supporting authentication, fulfilment, and live commerce. The company also projected that cutting $2 billion in annual costs would nearly double eBay’s earnings per share within 12 months. EBay has not yet publicly responded to the proposal.

Read Next: Ryan Cohen Told CNBC in January a Deal Was Coming. Here’s What He Said.