GameStop (GME) Stock Jumps 6% as Ryan Cohen Goes After eBay in $56 Billion Shock Bid

TLDR

• GameStop has made an unsolicited $56 billion offer to buy eBay at $125 per share — a roughly 20% premium to eBay’s Friday close.
• The deal is structured as 50% cash and 50% GameStop stock, with $20 billion in debt financing already committed from TD Securities.
• GameStop CEO Ryan Cohen has built a 5% stake in eBay and says he’s willing to take the offer directly to eBay shareholders if the board doesn’t engage.
• Cohen promises $2 billion in annualized cost cuts within 12 months and wants to position the combined company as a rival to Amazon.
• eBay jumped more than 8% in premarket trading Monday; GameStop rose over 6%.

GameStop CEO Ryan Cohen made a surprise move Sunday, sending an unsolicited offer to eBay’s board to acquire the e-commerce company for around $56 billion.

The offer values eBay at $125 per share — about a 20% premium to where the stock closed on Friday. GameStop rose over 6% on the news, while eBay surged more than 8% in premarket trading Monday.

The deal structure is half cash, half GameStop stock. Cohen said GameStop has roughly $9.4 billion in cash and liquid investments as of January 31, with the rest to be funded through debt and external financing.

GameStop Corp., GME

To back that up, Cohen has already secured a $20 billion debt commitment from TD Securities, a subsidiary of TD Bank. He may also seek capital from Middle Eastern sovereign wealth funds, according to the Wall Street Journal.

GameStop disclosed it has quietly built a 5% stake in eBay through stock and derivatives ahead of the proposal.

Cohen Threatens Proxy Fight

Cohen made clear he won’t back down easily. He told the Wall Street Journal he is prepared to go hostile — taking the offer directly to eBay shareholders if the board doesn’t engage.

He said he would serve as CEO of the combined company after any deal closes.

Cohen argues the merger could cut $2 billion of eBay’s annualized costs within 12 months. He’s pointed to what he sees as overspending on sales and marketing as the main target.

GameStop’s roughly 1,600 U.S. stores would serve as a national network for authentication, fulfillment, and live commerce, Cohen wrote in his letter to eBay’s board.

A Bid Nearly Four Times GameStop’s Size

The numbers here are striking. eBay had a market cap of around $46 billion at Friday’s close. GameStop was valued at roughly $12 billion. That makes this one of the more unusual M&A plays in recent memory.

Cohen has a track record of unconventional moves — he rose to prominence during the 2021 meme-stock frenzy and joined GameStop’s board that January, later becoming CEO and pushing cost cuts that returned the company to profitability.

But the business itself continues to face headwinds. GameStop reported a 14% drop in fourth-quarter revenue last month. The physical gaming retail model has struggled as the industry shifts to digital downloads.

eBay, by contrast, had a stronger recent showing. The company last week forecast second-quarter revenue above Wall Street estimates, driven by collectibles, motor accessories, and live-streamed auctions.

GameStop and eBay stock are up 32.1% and 19.5% respectively this year heading into this announcement.

eBay did not immediately respond to requests for comment on the offer.

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