GameStop Bids $55.5 Billion for eBay, Analysts Express Scepticism Over Business Models
Video game retailer GameStop has tabled a $55.5 billion cash and stock offer to acquire e-commerce behemoth eBay. The proposal values eBay at $125 per share, representing a $20 premium on its closing price in New York last Friday.
Ryan Cohen, GameStop's chief executive, has positioned the bid as a strategic move to revitalise eBay, suggesting that under his leadership, the company could become a legitimate challenger to Amazon. Cohen indicated a willingness to approach eBay shareholders directly should the board decline the offer.
Despite eBay's statement that it would review the proposal, market analysts have voiced considerable doubts. Morgan Stanley highlighted the 'fundamentally different' business models of the two companies, while Bernstein pointed to GameStop's significantly smaller balance sheet, expressing surprise if the deal were to materialise.
GameStop, which gained notoriety during the 'meme stock' phenomenon of the Covid-19 pandemic, has seen its net profit rise to $418.4 million in 2025 from $131.3 million the previous year, despite a fall in sales. eBay, approximately four times larger than GameStop by valuation, has experienced a decline in its user base from 175 million in 2018 to 136 million, amidst intense competition from Amazon.
Cohen, who would assume the role of chief executive of the combined entity without salary or bonuses, plans to implement $2 billion in cost reductions at eBay within the first year, primarily targeting its sales and marketing division. GameStop, with a current market valuation of around $11.9 billion, has secured a commitment letter from TD Securities for approximately $20 billion in debt financing to support the takeover.
Sucharita Kodali, a retail analyst at Forrester, described the offer as not 'terribly good' due to the potential for eBay to be burdened with GameStop's debt. She noted that while the merger could elevate GameStop's valuation, it would effectively combine 'not necessarily two strong companies'. On Monday, eBay shares saw a 5% increase in New York, whilst GameStop's stock declined by over 9%.
