The bid is for $125 per share, which represents a 20 percent premium compared to eBay's closing price on Friday. The payment is proposed to consist of half cash and half shares in Gamestop. eBay's market value is currently about four times higher than Gamestop's.
Gamestop has already built up a 5 percent stake in Ebay through shares and derivatives. The cash portion of the bid is planned to be financed through Gamestop's cash and liquid assets, which amounted to $9.4 billion at the end of January, as well as a loan commitment of up to $20 billion from TD Securities. The company may also seek external capital.
According to Gamestop, the goal of the acquisition is to create synergies and cut eBay's annual expenses by $2 billion within twelve months, among other things through cuts in marketing, administration and product development. Gamestop's 1,600 stores in the US are also said to be able to function as a network for authentication, logistics and live-shopping on behalf of eBay.
It could become a legitimate competitor to Amazon, Ryan Cohen said in an interview with the Wall Street Journal.
eBay should be worth - and will be worth - a lot more money. I'm thinking about making eBay something worth hundreds of billions of dollars, he added.
If the deal goes through, Ryan Cohen plans to take over as CEO of the merged company.
Gamestop gained international attention in 2021 when the company became a so-called meme stock with a significant increase in value as a result. The gaming chain previously struggled with profitability problems and filed for bankruptcy in its Swedish operations, among others. According to Gamestop, however, the company has turned a net loss of $381 million in fiscal year 2021 into a net profit of $418 million for 2025.
eBay, whose sales and revenues have exceeded Wall Street estimates recently, has not yet commented on the takeover bid.