GameStop Raises Its Paddle to Buy eBay

GameStop wants to buy eBay for $56 billion, but will still offer only ~$45 for your entire game collection. 

The chain’s unsolicited offer for the e-commerce giant is a move akin to a Pac-dot pellet trying to eat Pac-Man. GameStop’s worth an estimated $12 billion, while eBay was valued at $46 billion before its shares popped Monday morning. 

Ryan Cohen, the CEO of GameStop as well as the pet e-store Chewy, told The Wall Street Journal that GameStop has built a 5% stake in eBay. Cohen said it’s offering to pay $125 a share for the online auction site, a 20% premium on eBay’s Friday closing price. 

EBay said Monday that it’ll consider the offer, but Cohen’s prepared for a “No, thank you.” He said he’ll start a proxy fight if it comes down to it. 

Playing in Co-Op Mode

GameStop became a meme stock in 2021 after Cohen built a big stake in the company. In 2023, he was named CEO and began working to make the nostalgic chain more valuable, closing stores and focusing on collectibles like trading cards. The pivot’s starting to see a payoff, and GameStop wants to leverage eBay to double down:

• In the fourth quarter, GameStop’s collectibles segment made up a third of its total revenue, up from 21% in the same period a year earlier. That wasn’t enough to offset falling sales in hardware and software. EBay, meanwhile, notched a 19% revenue jump in the first quarter, pushed up by strength in collectibles as users scoured the site for Pikachu Illustrator cards and Funko Pop! figures.
• Cohen thinks eBay’s online presence and GameStop’s brick-and-mortar stores could boost each other. Cohen said he’d become CEO of eBay, which he thinks can compete on an equal footing with Amazon. 

Cred Check: EBay said, to paraphrase, that it’s reviewing GameStop’s ability to seal a legitimate buyout deal. It’s unclear where Cohen will obtain the $56 billion, considering GameStop’s balance-sheet cash is a fraction of that. Analysts are also skeptical that eBay, which has implemented a cost-cutting turnaround plan that seems to be working, needs GameStop’s intervention.