TL;DR
GameStop has submitted an unsolicited $55.5 billion bid for eBay at $125 per share, funded by $9 billion in cash raised through convertible debt, a $20 billion non-binding financing letter from TD Bank, and roughly $28 billion in new GameStop stock. The market is sceptical: eBay shares opened at $110, well below the offer, GameStop shares fell, and Michael Burry called the strategy “pedestrian” before announcing he would sell his position. CEO Ryan Cohen says the combined company would be “a legit competitor to Amazon,” but GameStop’s revenue has fallen by a third in two years and its core retail business is in structural decline.
Ryan Cohen announced on Saturday that GameStop has submitted an unsolicited, non-binding proposal to acquire eBay for $125 per share, a cash-and-stock offer valuing the e-commerce company at approximately $55.5 billion. GameStop’s market capitalisation at the time of the offer was $11.9 billion. eBay’s was $46.2 billion. The company proposing to buy is roughly a quarter of the size of the company it wants to acquire, its core retail business has lost more than a quarter of its revenue in the past year, it has closed over 700 stores since 2024, and its most significant recent financial moves have been issuing $4.2 billion in zero-coupon convertible debt and buying Bitcoin. Cohen told CNBC on Monday that the combined company would be “a legit competitor to Amazon.” The market’s reaction was instructive: eBay shares rose 6 per cent to $110, well below the $125 offer price, and GameStop shares fell.
The pitch
GameStop’s proposal is structured as 50 per cent cash and 50 per cent GameStop stock, with eBay shareholders able to elect their preferred mix subject to pro-rata allocation. TD Bank has provided a non-binding “highly confident letter” to underwrite up to $20 billion in debt financing. The funding gap between the financing commitment, GameStop’s $9 billion in cash reserves, and the $55.5 billion deal price would be bridged by issuing new GameStop shares, a mechanism that requires eBay shareholders to accept equity in a company whose stock trades on retail sentiment as much as on fundamentals.
The strategic vision centres on three claims. First, that GameStop’s 1,600 remaining US retail stores would serve as physical infrastructure for eBay’s marketplace: drop-off points, authentication centres, fulfilment hubs, and venues for live sales broadcasts featuring eBay products. Live selling is already sweeping Europe as the next major e-commerce channel, with platforms like Whatnot reporting a 600 per cent year-on-year increase in European sellers and McKinsey projecting that 20 per cent of online sales will flow through live shopping by the end of the year. Cohen is betting that physical stores can anchor that format in the US market. Second, that GameStop’s expertise in collectibles, trading cards, and used goods overlaps with eBay’s core categories. Third, that $2 billion in annual cost savings can be extracted within twelve months of closing.
The numbers
GameStop’s annual revenue for the fiscal year ending January 2026 was $3.63 billion, down from $5.27 billion two years earlier. Hardware and accessory sales declined 28 per cent. Software fell 15 per cent. The company closed 590 stores in fiscal 2024 and another 400 in January 2025 alone. The core business, selling physical video games and consoles in an industry that has moved almost entirely to digital distribution, is in structural decline. Profitability has been maintained through aggressive cost-cutting, not growth: net income was $127.9 million on shrinking revenue.
eBay, by contrast, reported $11.1 billion in revenue for 2025, up 8 per cent year-on-year, with gross merchandise volume approaching $80 billion and revenue for the twelve months ending March 2026 growing at 12.5 per cent. The company has $4.8 billion in cash and investments, authorised a $2 billion share buyback in February, and trades at a market capitalisation that reflects a business with healthy margins and an established global marketplace. eBay is not a distressed asset looking for a rescuer. It is a profitable, growing company being approached by a smaller, shrinking one.
GameStop’s $9 billion cash position, the number Cohen has cited as proof of the company’s capacity to execute the deal, was not generated by the retail business. It was raised by selling convertible debt: $4.2 billion in zero-coupon notes issued across two offerings in 2025, alongside earlier dilutive share sales during the meme stock surges of 2021 and 2024. The cash pile is real. The question is whether a war chest built on financial engineering and retail investor enthusiasm constitutes a credible acquisition currency for a company four times your size.
The scepticism
The market’s doubt is visible in the price. eBay shares opened Monday at $110, a full 12 per cent below the $125 offer price. When an acquirer offers a 20 per cent premium and the target’s shares trade at a 12 per cent discount to the offer, the market is pricing a high probability that the deal does not close. Bernstein analysts wrote that while there is overlap between GameStop and eBay in games, toys, and collectibles, the strategic rationale for a full acquisition at this scale remains unclear, and the financing challenges given GameStop’s smaller balance sheet are substantial.
Michael Burry, the investor who profited from the 2008 subprime crisis and who holds GameStop shares, said the strategy behind the deal “could not be more pedestrian” and that it would lead to more debt and shareholder dilution. He announced he would sell some or all of his GameStop position by the end of the week. Cohen’s CNBC interview on Monday did little to clarify the financing structure. When pressed on how the deal would be funded, he repeatedly directed viewers to the company’s website. “We are just starting,” he said of his outreach to eBay’s management. eBay confirmed it had received the proposal, noted there had been no prior discussion with GameStop, and said its board would review the offer in consultation with financial and legal advisers.
Market scepticism toward ambitious corporate plans is not limited to retail. Technology companies with extraordinary ambitions routinely face investor doubt about execution, financing, and whether the vision matches the balance sheet. The difference is that most companies facing such doubt are growing. GameStop is shrinking.
The context
Cohen built GameStop’s cash reserves through a strategy borrowed from MicroStrategy: use the stock’s volatility and retail investor base to raise capital through debt and equity issuances, then deploy that capital into assets that the market values more than the core business. MicroStrategy chose Bitcoin. GameStop chose Bitcoin too, purchasing 4,710 BTC for approximately $500 million in May 2025, though it subsequently sold covered-call options against virtually all of its holdings. The Bitcoin strategy did not transform GameStop into a technology company. It transformed GameStop into a financial vehicle with a video game retailer attached.
The eBay bid extends that logic. If the Bitcoin treasury strategy was Cohen’s first attempt to use GameStop’s unusual financial position to acquire assets beyond video game retail, the eBay offer is the second, at a scale that dwarfs the first. When Meta signed a $27 billion infrastructure deal with Nebius, it did so as a company with $164 billion in annual revenue and $60 billion in operating income. When Anthropic weighed a funding round at a $900 billion valuation, it did so as the fastest-growing AI company in the world. GameStop’s $55.5 billion bid comes from a company with $3.6 billion in declining revenue and a stock price sustained by a community of retail investors whose loyalty is extraordinary but whose willingness to absorb massive dilution is untested at this scale.
The question
The antitrust implications are manageable. A combined GameStop-eBay would control a significant share of the used goods marketplace but would remain a fraction of Amazon’s total e-commerce volume. The real obstacles are financial and structural. The deal requires approval from eBay’s board, shareholders of both companies, and regulatory review under an HSR filing GameStop plans to submit. eBay’s board has no obvious incentive to accept equity in GameStop as half the consideration, given the stock’s history of extreme volatility and the ongoing decline of the retail business that underpins it. GameStop would need to issue enough new shares to cover roughly $28 billion in stock consideration, diluting existing shareholders by an amount that has not been quantified but would be substantial.
Wall Street’s appetite for audacious technology bets remains strong: Anthropic, Blackstone, Goldman Sachs, and Hellman and Friedman are building a $1.5 billion joint venture to deploy AI across private equity portfolios. But there is a difference between financing a company with $6 billion in annualised revenue growing at triple-digit rates and financing a video game retailer whose revenue has fallen by a third in two years. TD Bank’s $20 billion commitment letter is non-binding. The financing gap remains unfilled. And Cohen has not explained how he intends to fill it beyond saying the company can “issue stock.”
GameStop has done remarkable things with financial engineering. It turned a meme stock rally into $4 billion in convertible debt. It built a $9 billion cash position from a business generating $3.6 billion in revenue. It convinced a major Canadian bank to put its name on a $20 billion financing letter for a deal that most analysts consider implausible. The bid for eBay is the logical conclusion of that trajectory: if the market will give you the money, use it to buy something real. Whether eBay’s board, its shareholders, and the capital markets agree that GameStop’s money is real enough to buy a $55.5 billion company is the only question that matters. The answer, based on Monday’s trading, is not yet.
