The video game retailer announced Sunday (May 3) it had submitted a nonbinding proposal to acquire 100% of the online marketplace. Following closing, GameStop CEO Ryan Cohen would serve as chief executive of the new combined company.
In its letter to eBay, GameStop noted that eBay had spent $2.4 billion on sales and marketing during fiscal year 2025 while adding just 1 million net active buyers.
“More spend is not producing more users on a marketplace with near-universal brand recognition,” the company said, pledging to cut around $1.2 billion in sales and marketing costs, part of $2 billion in annual cost reductions within 12 months of closing.
eBay, whose $46 billion market capitalization is nearly four times the size of GameStop’s, issued a statement Monday (May 4) acknowleging it had received the proposal.
“eBay’s Board of Directors, in consultation with its financial and legal advisors, will carefully review and consider the unsolicited proposal to determine the course of action that it believes is in the best interests of the company and all eBay shareholders. eBay shareholders are advised to take no action at this time,” the company said.
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The plan was reported Friday (May 1) by The Wall Street Journal (WSJ). That report said Cohen had been clear about targeting a major transaction. He had told WSJ earlier this year he was considering possible deal targets, particularly in the consumer and retail space, as part of a plan to move GameStop beyond video games and collectibles.
GameStop announced in January that its board approved a performance-based stock option award for Cohen, aimed at incentivizing the CEO to reach a $100 billion market cap. The company said the award is structured so that the incentives “are directly aligned with creating long-term value for GameStop’s stockholders.”
Also in January, GameStop announced plans to close 430 stores in the U.S. as part of an ongoing evaluation of its international assets and operations aimed at sustaining profitability.
“We have also initiated a comprehensive store portfolio optimization review, which involves identifying stores for closure based on many factors, including an evaluation of current market conditions and individual store performance,” the company said in a regulatory filing.
A separate report on the proposed deal by WSJ quotes analysts who say an acquisition would likely require significant levels of debt financing.
“We see real challenges to structuring this deal,” Bernstein analysts said in a research note, adding that a transaction could pose risks for an eBay turnaround that the online marketplace has said is going smoothly.
The company faces stiff competition from retail goliaths like Amazon and Walmart as well as companies like Etsy, Craigslist and Temu, WSJ added.
eBay in February announced an investment in TrueLayer as part of a collaboration with the Pay by Bank provider. The partnership will let eBay’s U.K. buyers pay directly from their bank accounts, authorizing transactions via their banking apps in seconds.
“Pay by Bank represents an important step in diversifying our payment mix with a secure, real-time way for buyers to pay directly from their bank accounts,” Avritti Khandurie Mittal, vice president of product for eBay Services, said in a news release at the time.
