GameStop makes $55.5bn takeover offer for eBay

Video game retail chain GameStop has made a surprise $55.5bn (£40.9bn) offer to buy e-commerce firm eBay.

The cash and stock offer values eBay at $125 a share, $20 more than the shares were valued at when New York trading ended on Friday, GameStop said in a statement on Sunday.

GameStop's chief executive Ryan Cohen said he is prepared to take the bid directly to shareholders if eBay's board rejects the approach.

In a letter to eBay, Cohen also said he planned to make $2bn of cost savings at the company within a year of the deal being completed. The BBC has contacted eBay for comment.

GameStop rose to prominence during the Covid-19 pandemic when it became the centre of the so-called meme stock craze.

This saw retail investors buy up shares in unloved companies that professional investors had bet against, causing their share price to rise and fall sharply.

The chain still has around 1,600 outlets in the US and has seen something of a turnaround under Cohen.

Its net profit rose to $418.4m in 2025 - up from $131.3m the previous year - although sales fell.

eBay, which is worth about four times more than GameStop, was launched in 1995 as a marketplace for hobbyists and became one of tech's best-known brands.

But its user base has shrunk amid competition from the likes of Amazon. It currently has 136 million users worldwide, down from 175 million in 2018.

Under the proposed deal to buy eBay, Cohen would become the chief executive of the new firm and receive no salary or bonuses, being "compensated solely based on the performance of the combined company".

GameStop, which currently has a stock market valuation of around $11.9bn, said it has a commitment letter from TD Securities to provide around $20bn in debt to help finance the deal.

The majority of the proposed cost cuts would be in eBay's sales and marketing division, which GameStop said had failed to attract more users to a "marketplace with near-universal brand recognition".

The proposal does not sound like a "terribly good offer" as it would saddle eBay with GameStop's debt, said retail industry analyst Sucharita Kodali from market research firm Forrester.

It makes sense for GameStop because it could lift its valuation by being linked with a larger company like eBay, she told the BBC.

"The truth is, we are not necessarily putting two strong companies together," Kodali added.

Shares in eBay jumped by more than 13% in after-hours trading when news of the potential offer emerged on Friday, while GameStop jumped by around 4%.

GameStop's shops would give eBay a national network for its "live commerce" and other business operations, Cohen said.

Cohen, who became the GameStop boss in 2023, has criticised its slow shift into e-commerce.