GameStop takes $56bn swing at eBay in high-stakes takeover bid

GameStop has made an unsolicited $56bn offer to acquire eBay, a target nearly four times its size, in a bold attempt to reshape its business and improve profitability.

eBay confirmed on Monday that it had received the proposal, noting there had been no prior discussions or outreach from GameStop before the bid landed.

The scale mismatch is hard to ignore. GameStop, valued at roughly $12bn, is proposing a deal split between cash and stock, backed by around $9bn in cash and $4.2bn in debt. Over the weekend, the company said it had already built a 5 percent stake in eBay and lined up as much as $20bn in potential debt financing from TD Securities to support the acquisition.

Chief executive Ryan Cohen is pitching the move as a turnaround play. He argues that the same cost-cutting strategy he applied at GameStop could be used to lift eBay’s margins, while also integrating GameStop’s network of roughly 1,600 US stores into eBay’s model to strengthen its position against Amazon.

“We have the ability to issue stock in order to get the deal done,” Cohen told CNBC.

GameStop is targeting cost reductions as the core value lever. It pointed to eBay’s $2.4bn spending on sales and marketing in fiscal 2025, which coincided with just 1 million net new active buyers, and said it could deliver $2bn in annualised cost cuts within a year of closing the deal. Under the proposal, Cohen — who owns about 9 percent of GameStop — would lead the combined company as CEO, with compensation tied solely to performance.

The bid lands against a complicated backdrop for GameStop itself. Cohen took over in 2023 after a period of leadership churn, with the company trying to adapt as digital distribution reshaped the gaming market. GameStop’s profile was also shaped by its role as one of Wall Street’s most visible meme stocks, surging in 2021 after retail investors drove its shares up roughly 1,000 percent in a matter of weeks.

Investor reaction, at least so far, leans cautious. Analysts at Morgan Stanley said the proposal raises more questions than answers, particularly around financing. They noted that an all-stock structure could be difficult to sell, given that the two companies operate on fundamentally different models and offer limited obvious synergies.

eBay’s business is built on marketplace fees, connecting buyers and sellers without holding inventory. GameStop, by contrast, is a traditional retailer that buys and resells goods through physical stores. While both touch categories like collectibles and trading cards, the overlap is narrow.

Funding the deal presents another hurdle. Morgan Stanley analysts said a leveraged buyout — assuming a premium of at least 20 percent — would make it the largest on record, surpassing the recently announced $55bn Electronic Arts transaction.

History offers limited precedent for smaller companies successfully acquiring much larger ones. One recent example, a deal involving Paramount Skydance and Warner Bros Discovery, relied heavily on backing from billionaire Larry Ellison.

For eBay, the bid comes as it continues to reposition itself away from mass-market e-commerce toward niches such as collectibles, luxury fashion and rare goods — a strategy that may not obviously align with GameStop’s retail footprint.