GameStop (GME) just made a big bet that would turn the video game retailer into a serious e-commerce player. On Sunday, the company proposed to buy eBay (EBAY) for $125 per share in a cash-and-stock deal, valuing the online marketplace at roughly $55.5 billion. That's a 20% premium over eBay's closing price on Friday.
The move comes after reports that GameStop had been quietly building a stake in eBay, with CEO Ryan Cohen eyeing a much bigger valuation. Cohen told the Wall Street Journal: "eBay should be worth–and will be worth–a lot more money. I'm thinking about turning eBay into something worth hundreds of billions of dollars."
Deal Structure and Financing
Under the proposed terms, eBay shareholders would get consideration split evenly between cash and GameStop stock. They can choose their preferred mix, but it's subject to pro-rata allocation. GameStop disclosed it already has a 5% economic interest in eBay through derivatives and direct share ownership.
To fund the cash portion, GameStop plans to use its own balance sheet—about $9.4 billion in cash and liquid investments as of Jan. 31, 2026—plus third-party financing. It has a "highly confident" financing letter from TD Securities for up to $20 billion. GameStop also said it will file a Schedule 13D and make an HSR filing on Monday.
Cost-Cutting and Synergies
GameStop says it can squeeze $2 billion in annualized expense reductions within a year after closing. The breakdown: about $1.2 billion from sales and marketing, $300 million from product development, and $500 million from general and administrative functions. The company estimates these cuts alone would lift eBay's diluted GAAP earnings per share from $4.26 to $7.79 in the first year after the deal closes.
GameStop also plans to leverage its roughly 1,600 U.S. stores to give eBay a national network for authentication, intake, fulfillment, and live commerce. The transaction would be subject to standard closing requirements.
Financial Resilience
GameStop's spokesperson emphasized a disciplined approach to its financial strategy, pointing to the company's substantial cash and investments exceeding $9 billion. That cushion gives GameStop the firepower to pursue big deals like this.
MarketDash's stock rankings indicate that GME maintains a strong price trend in the short, medium, and long term. The stock has a good Growth score in the 76th percentile and Value score in the 69th percentile.
Price Action: GameStop shares were up 3.96% at $27.58 in overnight trade. Over the past month, GME has gained about 18.3% versus a 9.9% rise in the S&P 500, and is up roughly 36% year-to-date compared to the index's 5.1% gain.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a MarketDash editor.
