GameStop is preparing a potential offer for eBay as CEO Ryan Cohen pushes an aggressive strategy to dramatically increase the struggling retailer’s market value, the Wall Street Journal reported on Friday.
The report said GameStop has quietly built a stake in eBay ahead of a possible bid. Cohen could take the proposal directly to eBay shareholders if the company resists, according to people familiar with the matter.
Shares reacted sharply to the news. eBay jumped about 14 percent in extended trading, while GameStop gained around 4 percent. eBay currently holds a market capitalization of roughly $46 billion, compared to GameStop’s nearly $12 billion.
Details of the potential offer remain unclear. The report added that a formal bid could come as soon as later this month.
Neither company nor Cohen responded immediately to requests for comment.
Unusual deal structure raises stakes
A potential acquisition would defy conventional dealmaking norms. Public companies rarely target firms significantly larger than themselves. Such deals often rely on heavy borrowing, stock issuance, or both.
Analysts say the move reflects Cohen’s willingness to take bold risks. His strategy hinges on leveraging future earnings of a combined entity to justify the scale of the transaction.
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GameStop has spent years trying to adapt to a rapidly shifting retail environment. The company struggled as consumers moved toward digital downloads and online shopping. It responded by closing stores and pivoting toward a more digital-first model.
Cohen, who joined the board in January 2021 and became CEO in September 2023, has driven cost-cutting measures that helped restore profitability. Still, revenue pressure persists.
The company reported a 14 percent drop in revenue to $1.10 billion during the holiday quarter, highlighting ongoing challenges in its core business.
Turnaround pressure mounts
GameStop recently unveiled a compensation package worth about $35 billion for Cohen. The package ties rewards to ambitious performance targets. These include lifting the company’s market value to $100 billion and achieving $10 billion in cumulative EBITDA.
The retailer’s shares remain far below the peaks seen during the 2021 meme stock rally, when retail investors propelled the stock to historic highs.
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Meanwhile, eBay has shown stronger momentum. Its shares have risen more than 19 percent this year. The company recently forecast second-quarter revenue above Wall Street expectations. Growth drivers include collectibles, motor accessories, and live-streamed auctions.
Industry observers say a deal could reshape both companies. GameStop would gain a massive online marketplace platform, while eBay could see renewed strategic direction under Cohen’s leadership.
However, execution risks remain high. Financing such a transaction and integrating two very different business models would test even seasoned management teams.
