GameStop's Ryan Cohen launches US$56-billion takeover bid for eBay

Shares in eBay surged ahead of Monday's opening bell after Ryan Cohen's GameStop tabled a takeover proposal valued at roughly US$56 billion, framing the deal as a way to mount a stronger challenge to Amazon in the online retail space.

The video-game retailer indicated that its network of around 1,600 stores across the United States could be repurposed as shipping and drop-off points for eBay transactions. Among the ideas floated is the use of GameStop outlets to host live broadcasts selling eBay merchandise.

"eBay has the second largest commerce franchise, and there's a big opportunity to do something much larger," Cohen told CNBC on Monday.

The offer is pitched at US$125 per share in a mix of cash and stock, putting the paper equity value of the transaction at US$55 billion.

eBay acknowledged the approach on Monday, noting that it had not been in any prior discussions with GameStop and had received no contact from the firm ahead of the proposal landing. The auction site said its board, working alongside financial and legal advisers, would assess the bid and decide on next steps.

GameStop disclosed that it had begun building a position in eBay in February and now holds a 5.0 per cent stake in the company.

The bidder is also targeting steep cost reductions at eBay, pointing to the US$2.4 billion the platform spent on sales and marketing in fiscal 2025 against a gain of just one million net active buyers. GameStop projects that it can deliver US$2 billion in annualised savings within a year of completing the deal.

Cohen, who controls roughly 9.0 per cent of GameStop, would step in as chief executive of the merged business. His pay package would be tied entirely to the performance of the combined company.

He took the top job at GameStop in 2023, at a point when the role had been changing hands repeatedly as the rise of game streaming weighed on traditional retail. The chain went on to gain notoriety as one of the most prominent meme stocks, after small retail traders drove its share price up by 1,000 per cent over a two-week stretch in 2021.

The stock has cooled significantly since that rally but is still ahead by more than 30 per cent so far this year. In premarket trading on Monday, eBay shares climbed more than 7.0 per cent, while GameStop slipped close to 3.0 per cent.

-AP