GameStop Corp.'s CEO Ryan Cohen said earlier this year that the company's next act would have to be big. Now, there's a name on just how big: eBay Inc. (EBAY).
The Grapevine, Texas-based company has proposed acquiring eBay for $125 per share in a cash-and-stock transaction valued at about $55.5 billion. The offer represents a 20% premium to eBay's closing price on Friday, and GameStop said Cohen would lead the combined company if the transaction closes.
That makes this more than a surprise takeover bid. It is the clearest follow-through yet on Cohen's January comments about his plan to turn GameStop from a roughly $11 billion company into a $100 billion-plus business. At the time, Cohen said he was considering a major acquisition of a publicly traded company, possibly in consumer or retail. He admitted the move would eventually prove to be either "genius or totally, totally foolish."
The eBay proposal looks like it's arriving at that exact moment.
GameStop is not just buying a business line. It is trying to buy scale. The company has already built a 5% economic interest in eBay through derivatives and direct share ownership. Under the proposed structure, eBay shareholders would receive half cash and half GameStop stock, though they could elect their preferred mix, subject to pro rata allocation.
Financing
The financing plan is central to the story. GameStop said it would use its existing balance sheet, including about $9.4 billion in cash and liquid investments as of Jan. 31, 2026, along with third-party financing that includes a "highly confident" financing letter from TD Securities for up to $20 billion.
The pitch is also heavily built around cost cuts. GameStop said it is targeting $2 billion in annualized expense reductions within one year after closing. The plan includes roughly $1.2 billion from sales and marketing, $300 million from product development and $500 million from general and administrative functions. GameStop estimates those cuts alone would lift eBay's diluted GAAP earnings per share from $4.26 to $7.79 in the first year after completion.
Cohen's broader idea appears to be that GameStop can turn its roughly 1,600 U.S. stores into a physical network for eBay, supporting authentication, intake, fulfillment and live commerce. That is the strategic bridge between GameStop's old retail footprint and Cohen's much larger ambition.
Risks
The risk is obvious: this is a huge swing by a company still trying to redefine itself. But that is also why Cohen's January quote matters. He warned that the move he was considering could look brilliant or reckless in hindsight. With eBay, GameStop has chosen the test.
GME Vs. EBAY Price Action: At the time of publication Monday, GameStop stock was trading at $24.68, having taken a 7% hit. Despite the drop, it's still 23.9% above its 52-week low and sits 3.3% above its 50-day moving average, with an RSI of 65.4 indicating it's nearing overbought territory.
Over the past six months, GME has climbed 12%, while EBAY has soared 35.6%. Over a year, GME shows a 7.3% decline, whereas EBAY shines with a solid 56.3% gain. EBAY is riding a wave of growth this year, outpacing GME by a fair margin.
