GameStop to Bid on eBay: GameStop (NYSE: GME) rose over 4.5 percent after market hours with news that it will make a formal proposal to acquire eBay (NASDAQ: EBAY), which also rose over 12 percent that same afternoon. According to The Wall Street Journal and CNBC+, CEO Ryan Cohen has his sights set on this deal to turn GameStop into a retail giant with a value of over USD 100 billion.
Why is GameStop betting on eBay?
GameStop is slowly building up its stake in eBay shares and could make an offer for the company soon. This move is a natural extension of GameStop’s recent focus on high-end collectible Items and gaming memorabilia that aligns with the existing eBay platform, which has long been a primary global marketplace for secondary-market collectible items and rare goods. It is possible that an official offer could be submitted to the eBay board as early as this month. If leadership proves unreceptive, Cohen may take the bid directly to eBay’s shareholders.
This move is also partially influenced by Cohen’s newly restructured compensation package that includes very large incentives to help GameStop transform; Cohen could earn as much as USD 35 billion in stocks if GameStop’s market cap achieves USD 100 billion. Despite its size being significantly smaller than eBay’s, GameStop boasts nearly USD 9 billion in cash, providing significant firepower.
How this deal could transform GameStop and eBay businesses
GameStop and eBay would both experience a complete overhaul if they merged. For GameStop, acquiring eBay would instantly pivot the company from a struggling video game retailer into an e‑commerce and collectibles giant.
For eBay, the deal would bring access to GameStop’s passionate retail following and the strategic vision of Ryan Cohen, who led a similar transformation at Chewy (an American online retailer of pet food/pet-related products, based in Florida) into what it is today, thus providing a long term competitive edge over Amazon and other online retail giants. Both entities will share Cohen’s philosophy of community first and will continue to improve operational efficiencies.
GameStop to bid on eBay: Market reaction
Both GameStop and eBay saw their stock prices spike following news of the possible acquisition.
GameStop rose more than 4 percent after-hours trading, trading at USD 27,58 at the time of writing, while eBay appreciated over 12 percent, trading at USD 116,37 (after-hours). Investors believe that a combination of both GameStop and eBay would allow the company to better compete with Amazon and other online retail platforms, especially in the gaming and collectibles markets. This move is similar (in the crypto world) to the There’s merger with XXI Capital, one of the biggest bets in the finance space.