E-commerce entrepreneur Ryan Cohen-led physical game store, GameStop, plans to expand into the online marketplace in a big way, and a rather audacious offer has come for eBay, a company four times the size of GameStop.
After a Wall Street Journal report over the weekend suggested the U.S. video game retailer would bid for the global online buyer-seller platform, GameStop made an official non-binding offer on May 3, 2026, at $125 per share, in a cash-and-stock deal, valuing eBay at roughly $55.5 billion.
The offer equates to a 46% premium to eBay’s closing session price on February 4, 2026, the same day when GameStop started accumulating shares in the company. GameStop’s current offer also translates to a 20% bonus to eBay’s Friday close of $104.07. The initial development sent stocks of both the listed companies surging on Friday. eBay Inc rose 13% to $118, and GameStop climbed 4% to $27.6 per share.
For GameStop under Cohen, it looks like a serious plan as the struggling video game retailer implements an aggressive expansion and course correction with cost cuts by shutting down over 400 non-performing stores in the U.S. It desperately wants to come out of the shadow of a brick-and-mortar retailer, and eBay presents a prime opportunity to enter the highly prized marketplace sector.
Cohen eyes a $100 billion valuation for the combined company, and such an aggressive plan certainly needs an ambitious strategy.
How GameStop Plans to Fund the eBay Deal
The cash consideration will be funded from a combination of cash and liquid investments, and third-party acquisition financing from TD Securities for up to $20 billion.
GameStop already owns 5% shares in eBay via derivatives and beneficial ownership of common stock. The rest of the obligation will be fulfilled through GameStop’s $9.4 billion cash reserves.
While eBay is yet to react to the development, GameStop’s non-binding offer is subject to approval from eBay’s board of directors, regulators, and shareholders of both companies. Following closely, Ryan Cohen will serve as CEO of the combined company.
This is more than just a development, as both companies have seen a substantive transformation, of late. Cohen, who co-founded e-commerce pet supply giant Chewy in 2011 and sold it to PetSmart in 2017 for $3.35 billion, is also the largest investor in GameStop at 9.2%. He does not receive any salary or cash bonuses and will be compensated solely based on the combined entity’s performance.
The GameStop board has also unveiled a rather ambitious $35 billion compensation package for him, provided he’s able to hit a $100 billion valuation and a $10 billion EBITDA earnings target.
eBay is also in revival mode: the company, which hit $3 billion in revenue in the first quarter of 2026, is pushing limited edition collectables and used goods relevant to video-game enthusiasts on its marketplace. The company is doubling down on focus categories like C2C and recommerce.
The Strategic Case for GameStop
The eBay acquisition plan, for Cohen, isn’t just an expansion from retail to online marketplace, but a complete identity shift, one that aligns with his previous playbook. He turned Chewy into a highly customer-centric business with a huge investor base, and that eventually earned him the top seat at the GameStop table.
Now, the Canadian entrepreneur wants to replicate a similar strategy at GameStop by turning it into a diversified powerhouse.
Though Cohen has made strategic high-margin product pivots at GameStop, like focusing on trading cards and collectables and its own line of accessories, he definitely wants to move quickly to play the game he knows the best, i.e., a customer-centric online business built around digital infrastructure. eBay fits perfectly into that.
eBay is currently stuck in the shrinking e-commerce market space. While its share stays 3% in the US, giants like Amazon are dominating the market at 38%. New-age competitors like TikTok Shop and Temu have also massively risen in popularity due to their focus on ‘impulse buying’.
Despite these struggles, eBay has shown strong growth (Q1 2026 revenue up 19%) as it taps high-value categories like luxury watches and sneakers. It has established tools for everything from payments to search, seller management and category oversight.
This plays well for Cohen, who gets a global infrastructure platform with existing liquidity in terms of buyers and sellers.
His latest proposal also flags eBay’s main pain points. eBay spent $2.4 billion on sales and marketing in 2025, while only adding 1 million net active buyers. Cohen says he can save $2 billion in annualised cost by cutting sales & marketing, product development and administrative costs in just one year of the deal.
Beyond cost, GameStop’s 1,600 US retail shops give eBay a national network for authentication, intake, fulfilment, and live commerce.
Why the Deal Would be Difficult to Pull off
On first glance, the proposed idea seems fascinating: a tugboat trying to tow an aircraft carrier. The sheer difference in size, eBay being valued at $46 billion and GameStop at $12 billion, makes it an incredibly difficult proposition. Cohen has himself called such an idea either a “genius move or totally foolish”.
The deal payout options proposed by Cohen have their downsides: one dilutes shareholder value, and another could put the brakes on the company’s profitability.
GameStop’s counterintuitive approach may not be enough to convince the eBay board members. After all, it’s a highly profitable and much bigger company ($2.3 billion in 2025, up 2.84% from 2024) as compared to GameStop.
GameStop, though also profitable ($418.4 million), has seen a consistent decline in its core business of selling physical video game discs. These factors suggest it’ll be hard to convince eBay management. Even the potential hostile takeover, via the direct shareholder route, has high chances of failure.
What This Means for the E-commerce Industry
For GameStop, the prospective deal gives it a direct entry into the global marketplace, where it’ll stand along with the likes of Amazon and Shopify.
Cohen wants to replicate his Chewy playbook with GameStop, but with eBay, the stakes are way higher. GameStop’s move away from an asset-heavy model to owning demand gives it a chance to turn GameStop into a full-stack speciality e-commerce platform, with the marketplace, retail media and financial services.
If GameStop is successful in its bet, it’ll certainly prove that a dedicated community and a massive cash pile can turn a struggling physical retailer into the internet’s new e-commerce hub.
