Dive Brief:
- GameStop submitted an unsolicited, nonbinding proposal to acquire eBay for $125 per share at a $55.5 billion aggregate equity value, according to a Sunday press release. The potential transaction would consist of 50% cash and 50% of GameStop’s common stock.
- If the acquisition were to close, GameStop CEO Ryan Cohen would serve as CEO of the combined entity with no salary, instead receiving compensation based on company performance.
- GameStop began accumulating a position in eBay on Feb. 4 and currently holds a 5% economic stake “through derivatives and beneficial ownership of common stock,” per the release. EBay confirmed receipt of the proposal on Monday, noting that it will thoroughly consider it, and flagged that it hadn't received outreach or had any discussions with GameStop prior to the proposal.
Dive Insight:
GameStop’s bullish proposal to acquire eBay comes as the gaming retailer has grown its collectibles offerings.
In GameStop’s fourth quarter, the category made up 33.1% of its net sales, marking an increase from 21.1% during the same period the year prior. Meanwhile, hardware and accessories made up 48.5%, a decrease from 56.6% in the fourth quarter of 2024.
The retailer highlighted its focus on collectibles, trading cards and refurbished tech in its complete eBay proposal letter. GameStop’s store staff already work in product authentication and could serve as a national fulfillment network for eBay drop-off and shipping nodes, per the proposal.
EBay's online marketplace also includes a focus on collectibles and trading merchandise. The company in the first quarter expanded its AI-powered card scanning feature “to include the company's top five collectible card game genres, and surpassed 30 million cumulative scans,” per the Wednesday earnings release.
The cash part of GameStop’s offer would be funded through a combination of its own $9.4 billion in cash and liquid investments, in addition to third-party acquisition financing — up to $20 billion through TD Securities.
GameStop says it would execute $2 billion of annualized cost reductions within a year of closing on an acquisition of eBay. About $500 million of that would come through the consolidation of finance, HR, real estate, legal, IT and professional services for the combined entity. Meanwhile, $1.2 billion of those projected savings would be through a reduction in sales and marketing spend. EBay spent $2.4 billion on sales and marketing in fiscal year 2025 and “only” added about 1 million net active buyers, GameStop called out in its release.
GameStop’s Q4 net sales fell nearly 14% year over year to $1.1 billion, and net income dropped about 3% to $127.9 million, per a March release. Its full-year net sales decreased about 5% to $3.6 billion, though net income improved over 200% to $418.4 million.
EBay’s Q1 revenue improved 19%, reaching $3.1 billion, and its net income grew 2% to $512 million. The online marketplace also announced its agreement to acquire apparel resale platform Depop in Q1 for about $1.2 billion.
