Video game retailer GameStop (NYSE: GME) made a splash in 2021 as one of the most famous “meme stocks” ever, when its stock price rose more than 1,700% thanks to a short squeeze organized by Reddit users. Now the company has grabbed global headlines once again—by proposing to buy online auction marketplace eBay for $55.5 billion, half in cash and half in stock.
Ryan Cohen—the billionaire Chewy co-founder who was named executive chairman of GameStop in June 2021 and became its CEO in September 2023—would serve as the CEO of the combined company if the proposed deal is accepted, according to the proposal, which GameStop published Sunday on its website.
GameStop operates around 1,600 retail stores across the U.S. Cohen owns around 9% of the company, noted the proposal, which added that he moved GameStop from a $381 million net loss in fiscal 2021 to $418 million of net income in fiscal 2025.
According to the Wall Street Journal, Cohen said he’s willing to wage a proxy fight if eBay declines the offer, in which case he would take his bid directly to eBay shareholders.
‘A smelt swallowing a whale’
Market observers and prediction markets seem to be taking a dim view of the acquisition’s chances.
In an editorial, the Wall Street Journal called the proposal “the equivalent of a smelt swallowing a whale,” given that GameStop has a market cap of $11 billion and it’s trying to chomp up the much larger eBay, whose market cap is $46 billion. The proposal is “another sign that the credit mania continues,” the WSJ added.
In a Monday note, Baird Equity Research Analyst Colin Sebastian said his firm gives the deal “a relatively low probability of success,” according to MarketWatch.
CNBC noted that traders on the prediction market platform Polymarket gave GameStop only a 15% chance at landing eBay.
In a tale of the tape, GameStop stock fell around 10% by Monday’s market close, to $23.84. Meanwhile, eBay shares rose 5%, closing at $109.33.
eBay considering the proposal
eBay (Nasdaq: EBAY)—a global commerce leader based in San Jose, California, that connects 135 million buyers across 190 markets— confirmed that it had received the proposal without any prior “discussions with or outreach from GameStop.”
eBay said its board, 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.” The company advised eBay shareholders to “take no action at this time.”
“Until the board has further carefully and thoroughly considered the proposal, the company does not intend to comment further at this time,” eBay added in its statement.
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