GameStop is hungry for relevance. Is buying eBay the answer?

By Bill Peters

GameStop has offered to buy eBay, which has done a better job of adapting to changing consumer preferences

Shares of both GameStop and eBay rallied late Friday.

Over the past decade, videogame retailer and original meme stock GameStop has struggled to contend with the dominance of online gaming, and its sales have declined. To turn things around, management is looking to join forces with a far bigger company: eBay.

On Sunday, GameStop (GME) CEO Ryan Cohen told the Wall Street Journal that he was making an unsolicited $56 billion offer to buy eBay (EBAY), and that if the deal is rejected he's prepared to take a proxy fight to shareholders.

In a statement Sunday night, GameStop said it was offering $125 a share in cash and stock, a 46% premium as of eBay's closing price Feb. 4, when GameStop started acquiring eBay shares. It has since taken a 5% stake.

EBay on Monday confirmed that it received the "unsolicited" proposal from GameStop, while saying it hadn't been contacted by GameStop before the proposal was received.

"The board will review this proposal with a focus on the value to be delivered to eBay shareholders, including the value of the GameStop stock consideration and the ability of GameStop to deliver a binding, actionable proposal," eBay said in a statement.

EBay's stock surged 8.1% in recent premarket trading Monday, to trade above the current record closing price of $107.13 reached on April 20, 2026. Meanwhile, GameStop shares fell 2.6%.

Under the proposal, Cohen would serve as CEO of the combined company.

GameStop said it could deliver annualized cost reductions of $2 billion with 12 months of closing the deal, which it said would result in an increase in eBay's diluted GAAP earnings per share from $4.26 to $7.79 in the first year.

Neither eBay nor GameStop immediately responded to MarketWatch's requests for additional comment.

Shares of both companies jumped in the extended session Friday after the Journal first reported that GameStop was planning to make an offer to acquire eBay. Shares of eBay rose nearly 12% in after-hours trading Friday, while GameStop's shares rose 4%.

Cohen told the Journal on Sunday that he thinks eBay is undervalued, saying "I'm thinking about turning eBay into something worth hundreds of billions of dollars."

According to Dow Jones Market Data, GameStop currently has a market capitalization of $11.2 billion, while eBay's stands at around $46 billion.

Bernstein analyst Nikhil Devnani questioned the merits of a deal. "There is obviously some overlap in segments (and likely audience) across games, toys, and collectibles," he wrote in a note to clients. "That said, eBay operates at a far bigger scale with a more diversified business."

He's unclear what GameStop would have to offer eBay from a strategic perspective.

Any potential move, the Journal noted, would come as Cohen sets his sights on expanding the company's market valuation to at least $100 billion. He could make up to $35 billion in stock compensation if GameStop's value reaches that $100 billion figure and other targets are hit, the Journal said.

EBay is at least on a better sales trajectory than GameStop: Its revenue was up 19% in its most recently reported quarter relative to a year before, while GameStop's fell 14%. The online marketplace has done a better job of reinventing its business by pushing into artificial intelligence, buying fashion site Depop and embracing collectibles.

Shares of eBay are up 51.7% over the past 12 months through Friday, although it recently announced a round of layoffs.

GameStop's stock has slipped 3.5% over the past 12 months.

Mike Murphy contributed to this report.

-Bill Peters

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05-04-26 0812ET

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