GameStop (GME) Stock Turns Up the Heat on eBay With Bigger Stake

TLDR

• GameStop increased its economic exposure to eBay from ~22.2M shares to ~29.1M shares via derivative-linked put/call options
• The position now equals about 6.55% of eBay’s outstanding stock, up from 5.0%
• Strike prices on the options range from $84.74 to $114.96
• CEO Ryan Cohen previously proposed acquiring eBay in a deal valued at ~$56B, which eBay rejected
• Year-to-date, GME is up 10% while EBAY has gained 31%

GameStop (GME) has quietly been building one of Wall Street’s more unusual positions — and it just got bigger.

GameStop Corp., GME

In an amended 13D filing on Tuesday, GameStop disclosed it has increased its economic exposure to eBay (EBAY) to approximately 29.1 million shares, up from around 22.2 million shares disclosed in a May 4 filing.

Add in 25,000 directly held eBay shares, and GameStop’s total position now represents about 6.55% of eBay’s outstanding stock. That’s up from roughly 5.0% just weeks ago.

The exposure is built through derivative-linked put/call option structures, not direct ownership. The strike prices on these pairs range from $84.74 to $114.96 per share.

One detail in the filing worth noting: if the options are physically settled, GameStop would gain sole voting power over the underlying shares. That’s not a passive position.

Ryan Cohen’s eBay Push

This all traces back to GameStop CEO Ryan Cohen, who has been running what looks a lot like an activist campaign targeting eBay.

Earlier this year, GameStop floated a proposal to acquire eBay in a deal reportedly valued at around $56 billion. eBay’s board rejected it, calling the offer “neither credible nor attractive.”

Cohen didn’t back down. In a recent interview with Anthony Pompliano, he took direct aim at eBay’s cost structure, saying the company “needs to be on Ozempic” because it had become “obese to an unhealthy degree.”

He said he expects eBay’s board and management to resist his push, largely because he would seek major leadership changes if he gained control. That’s not exactly a subtle hint.

Cohen has repeatedly pointed to what he sees as fat to cut at eBay — and Tuesday’s filing shows he’s still adding to the position while that conversation plays out publicly.

How the Stocks Have Moved

eBay stock has actually been the stronger performer so far this year. EBAY is up 31% year-to-date, while GME has gained 10% over the same period.

GameStop carries a P/E ratio of 29.47x, which reflects market expectations for growth. But the company’s underlying fundamentals tell a more complicated story — revenue has declined 30.3% over the past three years.

Insider activity at GameStop has skewed toward selling. Over the past three months, insiders offloaded around $400,000 worth of stock with no reported purchases on the other side.

GME’s GF Score sits at 51 out of 100, with low marks on profitability (4/10) and growth (1/10), and a middling financial strength rating of 5/10.

As of Tuesday’s filing, GameStop’s total eBay exposure stands at roughly 29.1 million derivative-linked shares plus 25,000 directly owned, giving it a combined economic interest of approximately 6.55% of eBay’s outstanding stock.

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