This is how Gamestop plans to take over Ebay, which is worth 4 times its value

The offer is structured so that the cash component will be 50% and the stock component 50%. Any transaction will require extensive financing from Gamestop, and will lead to the company being leveraged. At the end of 2025, Gamestop had cash balances and investments of about $9 billion, compared to long-term debt of about $4.2 billion. The company reported that it intended to finance the deal so that it would pay from its own sources about 9.4 billion dollars, and receive financing in the amount of 20 billion dollars from the American investment bank TD Securities.

Gamestop is currently known to investors mainly as a meme stock that jumped to record highs in 2021 when it jumped by thousands of percent in a short period of time. This follows a move in which masses of retail investors who were members of the investor community on the social network Reddit purchased shares, with the aim of causing a short squeeze, and led to the fact that hedge funds that bet against the stock lost large sums.

However, since the peak reached during the meme era, Gamestop stock has weakened by 69%. The move to purchase eBay comes as part of the desire of the company, under the management of CEO Ryan Cohen, to become a retail giant. Cohen, who has been in office since 2023, comes from the world of online commerce – he was one of the founders of the online retailer Chewy. In an interview with the Wall Street Journal four months ago, Cohen stated that in order to reach this goal, Gamestop will acquire a company from the consumer or retail sector.

Old and still growing

eBay is an old online trading company, founded back in 1995 and issued in 1998 with a value of several hundred million dollars, and its stock has soared since then. Over the years it has made several acquisitions. Last week it published its first quarter reports in which it presented a 19% growth in net revenues to $3.1 billion, a 2% increase in GAAP net profit to $512 million and a Non-GAAP net profit of $760 million, an increase of 16%.

Gamestop does not rule out the possibility that the purchase will be carried out as a hostile takeover, so if eBay does not respond to the offer, it will be submitted directly to the shareholders. This may start a fight, and possibly also lead to an increase in the offer, or to additional offers that will emerge from other parties. Gamestop is now offering a price of $125 for eBay stock, a 20.1% premium to the stock’s closing price at the end of last week. eBay shares jumped at the start of the trading week following the offer.

“Challenges and low probability”

According to Gamestop’s announcement, in 2025 eBay spent $2.4 billion on marketing and sales, but added only one million net active buyers. “Gamestop will work to reduce annual costs by 2 billion dollars, within 12 months of completing the deal,” the company promises. Of this, savings of 1.2 billion dollars will come from the field of marketing and sales, 300 million dollars from development and 500 million from management and general expenses, thanks to merging activities and reducing duplication in various areas. According to Gamestop, the acquisition will contribute to its profits already in the first year, and the 1,600 physical branches of the chain across the US will be able to be used by eBay for trading activities.

Gamestop CEO Cohen was quoted by Reuters as saying that eBay should be a legitimate competitor to Amazon and that it should be worth a lot of money: “I’m thinking about turning eBay into something worth hundreds of billions of dollars,” he said.

The investment bank Bernstein wrote in relation to the transaction that eBay is now in the midst of a turnaround process that is being carried out well, and warned of significant challenges in the structure of the transaction. Bloomberg also noted risks and estimated that the probability of a deal is low.”