GameStop (NYSE: GME) has thrown down the gauntlet to Amazon, offering $55.5 billion to acquire e-commerce giant eBay in a deal that CEO Ryan Cohen believes could create a “legit competitor” to the online retail behemoth.
The audacious bid arrives as eBay rides a wave of momentum, having reinvented itself to fend off mounting competition from Walmart, Amazon, Shein, and Facebook Marketplace.
On Sunday, GameStop—which captured the public imagination during the 2021 meme stock frenzy—announced its offer of $125 per share for eBay, splitting the payment evenly between cash and stock. That price tag represents a 46% premium over eBay’s closing share price on February 4, the day GameStop began quietly accumulating its 5% stake in the company.
Moreover, the proposal targets a company nearly four times GameStop’s size. As of Friday, GameStop carried a market value of $11.9 billion, while eBay commanded $46.2 billion, according to FactSet data. Investors responded swiftly: eBay’s shares jumped 9% in premarket trading, whereas GameStop’s stock pointed sharply lower after climbing 6.3% on Friday.
Cohen Pitches a Vision for the Combined Company
In a letter addressed to eBay’s chair, Cohen outlined his strategy to slash costs and boost profitability at the e-commerce platform. Furthermore, he highlighted the strategic value of merging GameStop’s physical footprint with eBay’s digital marketplace.
“GameStop’s ~1,600 US locations give eBay a national network for authentication, intake, fulfillment, and live commerce,” Cohen wrote.
Speaking to the Wall Street Journal, Cohen doubled down on his vision. “It could be a legit competitor to Amazon,” he said of eBay, adding that the platform should aggressively expand into live commerce—a format where brands pitch products directly to shoppers through real-time video streams.
Additionally, Cohen confirmed that he would step in as chief executive of the merged entity. To finance the deal, GameStop plans to draw on cash reserves and debt, including a commitment from TD Securities for up to $20 billion.
eBay Stages a Comeback
Since launching in 1995, eBay has remained a fixture among top US e-commerce platforms. Nevertheless, the company has steadily ceded market share as new competitors have crowded the field, according to research firm Emarketer.
The Covid-19 pandemic delivered a much-needed lift, and eBay has aggressively built on that momentum by investing in artificial intelligence—a strategy that has resonated with Wall Street. Consequently, eBay’s share price has surged roughly 52% over the past year, while the stock has rocketed 188% since the start of 2020.
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