Does GameStop’s Attempt To Buy eBay Make Sense?

On May 3, GameStop made the audacious move of submitting an unsolicited and non-binding proposal to acquire 100% of eBay, putting forth an offer of $125 per share in a half-cash, half-stock deal. For its part, on May 4 eBay penned a press release confirming that it had received the proposal — and said it would consider the deal — but further details from its side remained scarce. GameStop currently holds a ~5% stake in the online auction and live-selling platform, which it began accumulating in February.

eBay’s share price took off on May 4 following news of the proposal, gaining about 6% in early morning trading.

As CNBC noted, there are several headwinds facing down the potential acquisition:

• GameStop’s current market value is notched at about $12 billion, and eBay’s at about $46 billion. With the deal being worth about $56 billion, financing questions remain, despite the pop culture and gaming retailer having secured a $20 billion financing letter from TD Bank.
• GameStop CEO Ryan Cohen’s reputation as a bit of a maverick, as well as his hard push for the deal to go through, could rankle some. Cohen has stated that eBay has a fiduciary duty to consider the offer as a public company, and that he is prepared to launch a proxy fight should obstacles be placed in his way.

“It’s [eBay] also going to be making a lot more money in the future than it is today because it’s going to be run a lot more efficiently,” Cohen said, gesturing toward price cuts outlined in GameStop’s press release detailing the proposal.

“When a business is not growing users and spending $2.5 billion in sales and marketing, there’s a lot of fat to cut … it’s a business that can take on more leverage because it’s going to be making more money in the future.” Cohen added.

GameStop Plans To Slash eBay’s Spending Habits (if a Deal Is Made)

In its press release, GameStop criticized what it saw as eBay’s recent budgetary excesses, exemplified by the latter having spent $2.4 billion on sales and marketing in FY2025 while “only adding one million net active buyers,” from 134 million to 135 million.

As a result, should a deal materialize, GameStop signaled a cost-cutting move involving the following reductions: Approximately $1.2 billion from Sales & Marketing; about $300 million from Product Development, as expenses are outpacing revenue growth; and $500 million from General & Administrationg, with consolidation of finance, human resources, information technology, legal, real estate, and professional services being mentioned.

Cohen didn’t pull any punches when pressed as to his ability to grow an established and mature business, turning to his experience with GameStop as a retort.

“Didn’t you guys call for GameStop’s demise multiple times? Like, it should have been bankrupt by now?” Cohen said.

“Look at our financial performance. Is it better than you guys anticipated? Because you guys said it was going to be doing really, really poorly, and it’s actually doing okay,” he added.