GameStop targets eBay with unsolicited $56bn acquisition offer

eBay confirms receiving GameStop’s offer, with no prior discussions between the companies.eBay's stock surged on news of the offer while GameStop's stock tumbled [File: Steve Marcus/Reuters]Published On 4 May 2026GameStop made an unsolicited $56bn bid to acquire e-commerce giant eBay—a company with a market value nearly four times higher—as the video game retailer seeks to boost profitability.eBay confirmed the offer on Monday and said that there had been no prior discussion or outreach with GameStop before receiving the offer.Recommended Stories list of 4 itemslist 1 of 4Germany’s Merz downplays rift with Washington despite US troop drawdownlist 2 of 4Oil prices flat as Trump’s plan for Strait of Hormuz fails to calm marketlist 3 of 4NATO chief says Europeans have ‘gotten the message’ from Trump on defencelist 4 of 4Trump’s ‘Project Freedom’: Can US navy ‘guide’ stuck ships out of Hormuz?end of listGameStop, which is worth roughly $12bn, is attempting to buy the online bidding giant in a deal that would consist of half cash and half stock buyout, with just around $9bn in cash and a debt load of $4.2bn.GameStop disclosed over the weekend that it has already built a 5 percent stake in eBay and touted $20bn in potential debt financing from TD Securities to convince shareholders of the deal.CEO Ryan Cohen argued he could replicate his cost-cutting playbook at GameStop to boost eBay’s profitability, while tapping GameStop’s approximately 1,600 US stores into a physical network to make eBay a better competitor to Amazon.“We have the ability to issue stock in order to get the deal done,” Cohen told CNBC in an interview.GameStop said it is looking to lower costs at eBay, stating that the online seller spent $2.4bn on sales and marketing in fiscal 2025 while only adding 1 million net active buyers. GameStop claims it will achieve $2bn in annualised cost cuts within a year of the proposed transaction’s closing.Cohen, who owns about 9 percent of GameStop, would serve as CEO of the combined company. He would only be compensated based on the combined company’s performance.Cohen became CEO of GameStop in 2023. At the time, the position had become a revolving door, with the company trying to survive as streaming upended the gaming industry. GameStop became one of the most well-known meme stocks, creating a frenzy among retail traders on Wall Street. The company’s shares took off in 2021 after a band of smaller-pocketed investors helped boost its stock by 1,000 percent in two weeks.Wall Street scepticismMorgan Stanley analysts said the market needs more funding details and that an all-stock alternative could be a hard sell to investors, given that the two companies have “fundamentally different” business models and few revenue or cost savings from combining.Both eBay and GameStop sell collectibles such as trading cards, but their mainstay businesses are different. While eBay earns fees by connecting buyers and sellers online without holding inventory, GameStop is a traditional retailer that buys goods wholesale and resells them through physical stores.“The other primary option (to fund the deal) would be a leveraged buyout. Assuming at least a 20 percent premium, that would make this the largest leveraged buyout ever, surpassing the recently announced $55bn Electronic Arts transaction,” Morgan Stanley analysts said.Only a few deals in which a smaller company has bought a much larger one have succeeded. Paramount Skydance agreed earlier this year to buy larger rival Warner Bros Discovery, but the deal was bankrolled by Larry Ellison, one of the world’s richest people with a net worth above $200bn.Once a competitor to Amazon, eBay has repositioned itself in recent years as a destination for antiques, rare sneakers, and high-end fashion rather than mainstream e-commerce.That has helped power sales growth and boosted its stock price, with shares up nearly 20 percent so far this year following a strong earnings report last week.Analysts said even if the GameStop bid failed, it could draw interest from other potential acquirers.Cohen, who was a central figure in the 2021 meme-stock frenzy and built out online pet supplies retailer Chewy, has said he is ready to go hostile in his eBay approach.Buying eBay could help him make progress on the targets key to his compensation package worth roughly $35bn that GameStop unveiled in January, including growing its market value to $100bn.“The Big Short” investor Michael Burry, who holds GameStop shares and once likened Cohen to Warren Buffett, said the strategy behind the deal “could not be more pedestrian”, adding that it would lead to more debt and shareholder dilution.“Ryan’s attempt to take over eBay cannot possess the actual honest and true intent to compete with Amazon. Rather clearly, the intention must be to dominate collectibles and used goods of all ages,” he said in a Substack post, noting that he may sell some or all of his shares by the end of the week.eBay’s stock surged on news of the bid. It is up 5.4 percent in midday trading. GameStop, however, is trending in the opposite direction. The video game seller’s stock has tumbled 5.1 percent since the market opened.