In a significant development that could reshape the e-commerce sector, GameStop Corp. (NYSE: GME) announced today a non-binding proposal to acquire eBay Inc. (NASDAQ: EBAY) for $125.00 per share. This offer represents a substantial 46% premium over eBay's closing price on February 4, 2026, marking a crucial moment as GameStop seeks to expand its footprint beyond traditional gaming retail.

2. Details of the Proposal

GameStop's proposal comprises a combination of cash and stock, with the terms structured as 50% cash and 50% common stock. Shareholders will have election rights regarding the type of consideration they prefer, ensuring a pro-rata allocation. The total undiluted equity value of the offer stands at approximately $55.5 billion, highlighting the confidence GameStop has in this strategic acquisition. This valuation reflects a 27% premium to eBay's 30-day volume-weighted average price (VWAP) and a 36% premium to the 90-day VWAP.

The acquisition is contingent on standard closing conditions, and GameStop plans to fund the cash portion through its robust balance sheet, which boasted around $9.4 billion in liquid investments as of January 31, 2026. Additionally, GameStop has secured a highly-confident letter from TD Securities allowing for up to $20 billion in third-party acquisition financing.

3. Rationale Behind the Acquisition

GameStop's interest in eBay comes in the wake of eBay's significant spending on sales and marketing, which totaled $2.4 billion in fiscal 2025. Despite this investment, eBay only managed to add a mere one million net active buyers during the same period, raising questions about the effectiveness of its current strategy. GameStop aims to capitalize on this inefficiency by implementing substantial cost reductions post-acquisition.

Projected Cost Reductions

GameStop has pledged to deliver $2 billion in annualized cost reductions within the first year of the acquisition. This includes:

Sales & Marketing: Estimated savings of approximately $1.2 billion, as GameStop evaluates the efficacy of current spending in driving user growth on a well-established marketplace.

Product Development: A projected $300 million reduction, addressing the mismatch between product development expenses and revenue growth.

General & Administrative Costs: Potential savings of $500 million by streamlining operations across finance, HR, real estate, legal, IT, and professional services.

These measures could significantly enhance eBay's diluted GAAP earnings per share from continuing operations, potentially increasing from $4.26 to $7.79 in the first year alone.

4. Leadership Transition and Future Vision

Following the successful completion of the acquisition, Ryan Cohen, the current CEO of GameStop, will assume the role of Chief Executive Officer of the combined entity. Cohen has been at the helm of GameStop since January 2021, during which he has transformed the company from a $381 million net loss in fiscal 2021 to a net income of $418 million in fiscal 2025. His leadership has also seen substantial cost reductions and the retirement of legacy debt, positioning GameStop as a more agile player in the retail landscape.

Cohen, who holds approximately 9% of GameStop and does not receive a salary or cash bonuses, will be compensated based solely on the performance of the new entity, reinforcing his commitment to driving value for shareholders.

5. Conclusion

GameStop's proposal to acquire eBay marks a bold and strategic move aimed at enhancing efficiency and scaling operations in the competitive e-commerce space. As the retail landscape continues to evolve, this potential acquisition could not only redefine GameStop's business model but also bring a new level of competition to the e-commerce sector, ultimately benefiting consumers and shareholders alike. The coming months will be critical as GameStop navigates regulatory approvals and engages with eBay's board to realize this ambitious vision.

Original press release