GameStop Corp. (NYSE:GME) on Sunday proposed to acquire eBay Inc. (NASDAQ:EBAY) for $125 per share in a cash-and-stock transaction, valuing the video game retail chain at approximately $55.5 billion.
The offer represents a 20% premium to eBay’s closing price on Friday.
This move by GameStop follows reports that the company has been quietly building a stake in the e-commerce firm, aiming to increase its market value significantly, with CEO Ryan Cohen expressing ambitions to reach a $100 billion valuation.
Deal Structure, Financing
Under the proposed terms, eBay shareholders would receive consideration split evenly between cash and GameStop stock, with the ability to elect their preferred mix, subject to pro-rata allocation. GameStop disclosed it has already assembled a 5% economic interest in eBay through a combination of derivatives and direct share ownership.
The company plans to fund the cash portion using its existing balance sheet, about $9.4 billion in cash and liquid investments as of Jan. 31, 2026, alongside third-party financing. It has secured a “highly confident” financing letter from TD Securities for up to $20 billion.
GameStop added that it plans to submit a Schedule 13D and make an HSR filing on Monday.
Cost-Cutting Strategy And Synergies
GameStop said it targets $2 billion in annualized expense reductions within a year after closing the deal. The breakdown includes about $1.2 billion tied to sales and marketing, roughly $300 million from product development, and about $500 million from general and administrative functions.
The company estimates that these measures alone would lift eBay’s diluted GAAP earnings per share from $4.26 to $7.79 in the first year following the deal’s completion. GameStop said it would lean on its roughly 1,600 U.S. stores to give eBay a national network for authentication, intake, fulfillment, and live commerce. The retail chain said the transaction would be subject to standard closing requirements.
GameStop said Cohen would take the CEO role at the combined company if the deal closes. “eBay should be worth–and will be worth–a lot more money”, Cohen told the Wall Street Journal. “I’m thinking about turning eBay into something worth hundreds of billions of dollars.”
Financial Resilience Fuels Acquisition Strategy
The recent focus on eBay’s performance highlights GameStop’s strategic considerations regarding its acquisition bid. In past discussions, GameStop’s spokesperson emphasized a disciplined approach to its financial strategy, referencing the company’s substantial cash and investments exceeding $9 billion, which could provide a significant financial cushion for future initiatives.
Benzinga Edge Stock Rankings indicate that GME maintains a strong price trend in the short, medium and long term. The stock has a good Growth score in the 76th percentile and Value score in the 69th percentile.
Price Action: GameStop shares were up 3.96% at $27.58 in overnight trade, according to Benzinga Pro. Over the past month, GME has gained about 18.3% versus a 9.9% rise in the S&P 500 and is up roughly 36% year-to-date compared to the index’s 5.1% gain.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
Photo courtesy: Lyonstock / Shutterstock.com
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