GameStop Corp. proposed to acquire all common stock of eBay Inc. at $125 per share, the latest proposal coming after GameStop accumulated a 5% economic stake in the e-tailer through derivatives and common stock ownership.
For its part, eBay acknowledged receipt of the GameStop acquisition proposal, saying it had no prior discussions with or outreach from GameStop and that its board, in consultation with financial and legal advisors, would review and consider the proposal to determine what course of action might be in the best interests of the company and eBay shareholders. EBay advised shareholders to take no action at this time.
In a letter from board chairman and CEO Ryan Cohen, Cohen indicated he would serve as CEO of the combined company, receiving no salary, no cash bonuses and no golden parachute. Cohen will be compensated solely based on the performance of the combined company, he emphasized. An announcement from GameStop revealed Cohen owns about 9% of the company and receives no salary, cash bonuses or golden parachute.
As part of the non-binding proposal, Cohen stated the $125 offer for eBay breaks down to 50% cash and 50% GameStop common stock, representing a 46% premium to eBay’s closing price on February 4, the day GameStop started accumulating its position in eBay. He added that the offer also represents a 27% premium to the 30-day volume-weighted average price of eBay shares, and a 36% premium to the 90-day VWAP. Aggregate undiluted equity value would come to $55.5 billion, he pointed out.
Cohen went on to state eBay spent $2.4 billion on sales and marketing in fiscal 2025, bringing on one million net active buyers, from 134 million to 135 million. In a purchase, eBay would take $2 billion of annualized costs out of the business within 12 months of close, including $1.2 billion from sales and marketing, $300 million from product development and $500 million from general and administrative expenses.
Cohen noted that, since 2021, GameStop has gone from a $381 million net loss to $418 million of net income, with SG&A down about $800 million, or by 47%.
On cost reductions alone, eBay’s diluted GAAP earnings per share from continuing operations would grow from $4.26 to $7.79 the first year of the merger, Cohen maintained. GameStop’s 1,600 U.S. store locations would give eBay operations a national network for authentication, intake, fulfillment and live commerce.
GameStop had $9.4 billion in cash and liquid investments as of January 31, Cohen indicated. Cash and liquid investments on GameStop’s balance sheet and third-party equity and debt financing, to become fully committed at execution of definitive documentation, would fund the cash consideration. He went on to say TD Securities had provided a letter covering $20 billion in potential commitment, and that the GameStop board unanimously supports the acquisition.
