GameStop, the video game retailer that became a household name during the 2021 meme-stock frenzy, submitted a non-binding proposal on Sunday to acquire eBay for approximately $55.5 billion. The offer values eBay at $125 per share, split evenly between cash and GameStop common stock, and represents one of the more audacious M&A plays in recent memory: a company worth roughly $12 billion trying to swallow one valued at $46 billion.
The offer represents a 20% premium to eBay's Friday close of $104.07, and a 46% premium to its closing price on Feb. 4, when GameStop began building its stake. GameStop has accumulated a 5% economic stake in eBay through derivatives and common stock ownership, and plans to file a Schedule 13D and HSR notification.
The Financing Picture
GameStop secured a non-binding "highly confident letter" from TD Bank to provide about $20 billion of debt financing. The company would fund the remainder from its approximately $9.4 billion cash pile, with the possibility of issuing additional shares to close the gap. Reports suggest GameStop could also pursue outside funding, including from Middle East sovereign wealth funds.
CEO Ryan Cohen has been characteristically blunt about his intentions. He told Reuters he was prepared to take the bid directly to shareholders should eBay's board be unreceptive. In January, Cohen acknowledged the risk: "It's ultimately either going to be genius or totally, totally foolish."
The Strategic Logic
GameStop pledged to find $2 billion in annual savings within 12 months of closing. The cost-cutting plan includes $1.2 billion from sales and marketing at eBay, $300 million from product development, and $500 million from general and administrative expenses.
The logic here centers on collectibles. eBay has invested heavily in returning to its roots as a place to buy and sell collectibles, acquiring auction house Goldin, marketplace TCGPlayer, and sneaker authentication service Sneaker Con. In Q4 2025, eBay reported revenue of $3.0 billion, up 15% year-over-year, with GMV of $21.2 billion, up 10%. The collectibles category was the largest contributor to eBay GMV growth in Q1 2026.
GameStop, meanwhile, has been pivoting in the same direction. Software sales at GameStop fell to $197.5 million from $271.8 million, while collectibles revenue grew to $256.1 million from $171.1 million. The company has been following the Strategy playbook on Bitcoin as well: as of May 2026, GameStop held 4,710 BTC valued at $371.6 million.
Cohen sees benefits in combining GameStop's brick-and-mortar stores with eBay's online presence. "GameStop's ~1,600 US locations give eBay a national network for authentication, intake, fulfillment, and live commerce," he noted in his letter to eBay's chair.
Two Companies in Transition
Both companies have been shrinking their way to profitability. GameStop shuttered 727 stores in the U.S. last year, bringing its store footprint from 2,915 locations in February 2024 to 1,598 as of January 31. The company has sold its Italian division, ceased operations in Germany, Ireland, Switzerland, and Austria, and may close its Canadian operations.
For the full fiscal year, GameStop's net sales dropped about 5% to $3.63 billion while net income improved over 200% to reach $418.4 million. The company has achieved profitability through ruthless cost-cutting, but revenue continues to decline as digital game downloads replace physical media.
eBay, for its part, has been finding growth in niche categories. Recommerce, selling preowned and refurbished goods, now makes up 40% of eBay's total GMV. Strategic priorities GMV comprised about two-thirds of total GMV, or more than $50 billion in 2025, growing approximately 10% year-over-year.
Market Reaction and Outlook
Shares of eBay surged as much as 13.4% in after-hours trading to around $118, well below GameStop's $125 offer, suggesting investors are skeptical the deal will close. Both companies have struggled to adapt to shifting consumer preferences, and it remains unclear whether eBay's board will view GameStop as a credible acquirer.
eBay confirmed it received the offer and said its board would review it. A deal this size will face scrutiny from the FTC and potentially international regulators, though e-commerce consolidation hasn't faced the same headwinds as Big Tech platform deals.
What makes this proposal interesting beyond its sheer audacity is what it says about the state of retail transformation. A company built on physical game sales, sustained by meme-stock capital raises and a Bitcoin treasury strategy, is now attempting to buy a 30-year-old e-commerce pioneer. Cohen stands to benefit enormously if successful: GameStop announced a compensation package earlier this year that could pay him as much as $35 billion if he reaches certain valuation and profitability targets, including a $100 billion market cap.
The parallels to Strategy's transformation are obvious but incomplete. Michael Saylor turned a struggling software company into a Bitcoin accumulation vehicle. Cohen appears to be attempting something more ambitious: using meme-stock capital to build an actual operating business large enough to challenge Amazon. Whether eBay's board, its shareholders, or regulators will let him try remains to be seen.
