May 4, 2026
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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.
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Discussion Questions
Does GameStop’s offer to buy eBay make sense, in your opinion? Are there any benefits or obstacles worth mentioning?
Given the significant increase in collectibles and video games / other forms of multimedia entertainment in recent years, could GameStop parlay this into a bigger focus for eBay?
If the deal falls through, is Cohen right that eBay needs to tighten its spending?
Poll
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The acquisition is problematic across a number of dimensions. The most obvious is there being no clear path to financing the deal. Without that, it is very easy for eBay to dismiss the offer.
The other big problem is one of logic. GameStop says it will cut costs and grow revenue. While it is true eBay spent a lot on marketing and pulled in some 1 million new customers, that marketing also helps retain and activate existing customers in a more competitive environment. I am sure there are some efficiencies, but cutting blindly will have a negative impact on revenue.
GameStop also seems to think it can turn eBay into Amazon by using its store base. That is folly. Yes, there is an overlap in some collectibles categories, but not in most others. And having a bunch of older stores in malls does not come anywhere near the logistical prowess needed to challenge Amazon.
There are a lot of ambitions here but for a deal of this size they need to be thought through a great deal more.
I’m not sold on this. Mr. Cohen has done better than expected with GameStop, but eBay is a big bite. You can’t just cut expenses to success…if it was that simple, eBay management would have done it. I think Cohen is more interested in getting a $35b pay package vs turning eBay/GameStop into a special combination.
No. Just like Allbirds now being an AI company.
Excuse me, can I buy a pair of shoes?
No, sorry sir, we don’t sell those now. Can I interest you in some AI compete power?
B…b…but its stock soared afterward, right?
(Such is the “efficient market” theory…at least until we add the “eventually” proviso)
What we have here is a search for relevance…but a failed one.
Efficiency matters. Relevance wins.
GameStop is seeing something real, but the deal has to be judged through how marketplaces actually work.
eBay still has traffic, trust, buyers, sellers, and real strength in collectibles. That gives GameStop a natural connection point with gaming, resale, fandom, and community.
The risk is assuming the answer is simply cutting costs. Marketplaces need movement. Buyers bring sellers. Sellers bring buyers. Marketing and product are part of that engine. Cut too deeply and you may save money while weakening the reason people show up.
GameStop stores won’t make eBay into Amazon. But they could become physical points for trade-ins, authentication, pickup, events, and collector community if the model is built with discipline. The opportunity is a more relevant eBay.
Traffic is the gift. Trust is the engine. Relevance is the win.
I once worked for a company that rolled up disparate companies thinking they could turn them around. Nope.
what docGamestop and eBay have in common? Nothing
Why not Tesla? or Apple?
I’m sure either of those would make sense, if you’re willing to suspend whatever particular tenets of common sense were traumatized by the idea. Suffice it to say any idea that is headlined with the word “audacious” has a high hurdle to clear to gain my nod….it hasn’t made it.
What will tomorrow bring? RetailWire bidding for the New York Times or News Corp?!
Is that what tomorrow’s RetailWire call is about?
I think with AI we can run them
(and in the case of the latter, maybe without it)
I’m bored in retirement. Anyone want to give me a few billion to effect a turnaround? Lots of synergies there
If only everyone saw this as a joke.
This just doesn’t make sense. Two M&A tests kill this deal. HBR’s better-off test asks whether the combination makes either entity measurably stronger than it would be on its own. It doesn’t. Collis and Montgomery’s corporate strategy triangle demands alignment across distinctive resources, shared businesses, and organizational capability. GameStop’s cost discipline and collectibles community are simply incompatible with eBay’s marketplace logic. The triangle collapses. Cohen’s cost-cutting thesis also carries a hidden risk: slashing marketing in a two-sided marketplace risks triggering a reversal of network effects.
Those arguing that GameStop’s stores become eBay distribution nodes have a point, but they’ve drawn the wrong conclusion. Where genuine pickup or trade-in value exists, a commercial partnership would capture it cleanly.
There’s an additional angle to shed light on. Cohen’s compensation vests across nine tranches starting at a $20 billion market cap. GameStop sits at $12 billion today. eBay’s EBITDA alone accelerates multiple tranches simultaneously. This seems less about a vision for a commerce platform and more about a compensation structure in search of an acquisition large enough to trigger it.
The only good option here for customers to understand and make sensical order would be eBay becomes the overarching brand, the face of it all, which happens to offer GameStop merchandise. Even then, and after substantial cost cutting and efficiencies gained, the upside growth potential for the two as one seems capped.
Gamestop and Ebay : Well both structured differently, dont see any corelation other then acquition. Also as per Mr. Cohen mesg, seem he is more focussed toward cost cutting measure then clear roadmap to how gamestop and eBay complement eachother
A perfect example of CEO hubris.
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The acquisition is problematic across a number of dimensions. The most obvious is there being no clear path to financing the deal. Without that, it is very easy for eBay to dismiss the offer.
The other big problem is one of logic. GameStop says it will cut costs and grow revenue. While it is true eBay spent a lot on marketing and pulled in some 1 million new customers, that marketing also helps retain and activate existing customers in a more competitive environment. I am sure there are some efficiencies, but cutting blindly will have a negative impact on revenue.
GameStop also seems to think it can turn eBay into Amazon by using its store base. That is folly. Yes, there is an overlap in some collectibles categories, but not in most others. And having a bunch of older stores in malls does not come anywhere near the logistical prowess needed to challenge Amazon.
There are a lot of ambitions here but for a deal of this size they need to be thought through a great deal more.
I’m not sold on this. Mr. Cohen has done better than expected with GameStop, but eBay is a big bite. You can’t just cut expenses to success…if it was that simple, eBay management would have done it. I think Cohen is more interested in getting a $35b pay package vs turning eBay/GameStop into a special combination.
No. Just like Allbirds now being an AI company.
Excuse me, can I buy a pair of shoes?
No, sorry sir, we don’t sell those now. Can I interest you in some AI compete power?
B…b…but its stock soared afterward, right?
(Such is the “efficient market” theory…at least until we add the “eventually” proviso)
What we have here is a search for relevance…but a failed one.
Efficiency matters. Relevance wins.
GameStop is seeing something real, but the deal has to be judged through how marketplaces actually work.
eBay still has traffic, trust, buyers, sellers, and real strength in collectibles. That gives GameStop a natural connection point with gaming, resale, fandom, and community.
The risk is assuming the answer is simply cutting costs. Marketplaces need movement. Buyers bring sellers. Sellers bring buyers. Marketing and product are part of that engine. Cut too deeply and you may save money while weakening the reason people show up.
GameStop stores won’t make eBay into Amazon. But they could become physical points for trade-ins, authentication, pickup, events, and collector community if the model is built with discipline. The opportunity is a more relevant eBay.
Traffic is the gift. Trust is the engine. Relevance is the win.
I once worked for a company that rolled up disparate companies thinking they could turn them around. Nope.
what docGamestop and eBay have in common? Nothing
Why not Tesla? or Apple?
I’m sure either of those would make sense, if you’re willing to suspend whatever particular tenets of common sense were traumatized by the idea. Suffice it to say any idea that is headlined with the word “audacious” has a high hurdle to clear to gain my nod….it hasn’t made it.
What will tomorrow bring? RetailWire bidding for the New York Times or News Corp?!
Is that what tomorrow’s RetailWire call is about?
I think with AI we can run them
(and in the case of the latter, maybe without it)
I’m bored in retirement. Anyone want to give me a few billion to effect a turnaround? Lots of synergies there
If only everyone saw this as a joke.
This just doesn’t make sense. Two M&A tests kill this deal. HBR’s better-off test asks whether the combination makes either entity measurably stronger than it would be on its own. It doesn’t. Collis and Montgomery’s corporate strategy triangle demands alignment across distinctive resources, shared businesses, and organizational capability. GameStop’s cost discipline and collectibles community are simply incompatible with eBay’s marketplace logic. The triangle collapses. Cohen’s cost-cutting thesis also carries a hidden risk: slashing marketing in a two-sided marketplace risks triggering a reversal of network effects.
Those arguing that GameStop’s stores become eBay distribution nodes have a point, but they’ve drawn the wrong conclusion. Where genuine pickup or trade-in value exists, a commercial partnership would capture it cleanly.
There’s an additional angle to shed light on. Cohen’s compensation vests across nine tranches starting at a $20 billion market cap. GameStop sits at $12 billion today. eBay’s EBITDA alone accelerates multiple tranches simultaneously. This seems less about a vision for a commerce platform and more about a compensation structure in search of an acquisition large enough to trigger it.
The only good option here for customers to understand and make sensical order would be eBay becomes the overarching brand, the face of it all, which happens to offer GameStop merchandise. Even then, and after substantial cost cutting and efficiencies gained, the upside growth potential for the two as one seems capped.
Gamestop and Ebay : Well both structured differently, dont see any corelation other then acquition. Also as per Mr. Cohen mesg, seem he is more focussed toward cost cutting measure then clear roadmap to how gamestop and eBay complement eachother
A perfect example of CEO hubris.