On Sunday, May 3, Ryan Cohen - the chairman and CEO of GameStop, the video game retailer best known for being the center of a 2021 trading frenzy that made and broke fortunes overnight - sent a letter to the board of eBay. The letter proposed that GameStop acquire 100% of eBay at $125 per share in cash and stock. The total price tag: roughly $55.5 billion.
GameStop is worth about $12 billion. eBay is worth about $46 billion. So the company doing the offering is valued at approximately one-quarter of the company it wants to buy. Cohen's plan requires assembling $9.4 billion in cash off GameStop's balance sheet, roughly $20 billion in debt from a bank, and an unspecified amount of freshly issued GameStop stock - all to buy a platform nearly four times larger.
When Cohen appeared on CNBC's Squawk Box today to explain the deal, things got tense. The anchors pressed him repeatedly on where the remaining money would come from. Cohen kept redirecting them to the company's website.
"We're offering half cash, half stock, and we have the ability to issue stock in order to get the deal done. But the full details of the offer are on our website."
When anchor Andrew Ross Sorkin laid out the arithmetic gap between available funds and the $55.5 billion price tag, Cohen's response was: "I don't understand your question." He said it more than once, to journalists who very clearly understood the question. It was, in the words of one YouTube commenter, "the greatest corporate interview I have ever seen lifetime to date."
That reaction should tell you something about who is paying close attention to this deal - and why.
The background
GameStop is not the company it was. Through most of the 2010s, it ran physical stores where people bought and traded video games. Then digital downloads arrived - game distribution moved online, and GameStop's stores became, essentially, waiting rooms for a business model that was already dying.
By fiscal 2021, the company was losing $381 million a year. Multiple analysts called for bankruptcy. Then came January 2021, when retail investors on Reddit's WallStreetBets forum noticed that short sellers - investors who profit when a stock falls - had bet heavily against the company. The Redditors bought shares in enormous quantities, forcing the short sellers to scramble and driving GameStop's stock up by roughly 1,500% in two weeks. The company became a symbol of ordinary people briefly beating Wall Street at its own game. It also became one of the most watched tickers on any exchange.
Cohen joined GameStop's board in January 2021 and was appointed CEO in September 2023. He had previously founded Chewy, the online pet retailer, and sold it for $3.35 billion. His pitch at GameStop was simple: cut costs aggressively, stop bleeding cash, and figure out the next move. On CNBC today, he was almost cheerfully unsentimental about what he had inherited:
"GameStop - very difficult business, should have been bankrupt multiple times over. And it's doing okay. It's making a few bucks."
By fiscal 2025, GameStop had swung to $418 million in net income and accumulated $9.4 billion in cash and liquid investments - largely from stock sales during the meme-stock frenzy. No debt. A war chest.
eBay's trajectory has been less dramatic and arguably more worrying. The platform launched in 1995, when buying a used camera from a stranger in Ohio was still a genuinely novel idea. It became one of the internet's first great marketplaces - platforms where buyers and sellers meet but the platform itself holds no inventory. For decades, eBay competed directly with Amazon. Then Amazon built a logistics empire, eBay did not, and the gap widened. eBay still has 135 million active buyers globally. It still generates meaningful cash. But it spent $2.4 billion on sales and marketing in fiscal 2025 while adding fewer than one million net new buyers - an increase of less than 0.75% on its existing base. That is a lot of money for almost no growth.
What is actually happening
On May 3, GameStop filed a Schedule 13D with the U.S. Securities and Exchange Commission - the regulatory disclosure required when an investor accumulates more than 5% of a public company - and simultaneously went public with the acquisition proposal. Cohen confirmed that GameStop had been quietly building a stake in eBay since February 4, using primarily derivatives - financial instruments that give exposure to a stock's price movements without requiring outright ownership - to stay below the threshold that triggers mandatory disclosure.
The offer, as laid out in GameStop's official press release, is $125 per share, split 50% cash and 50% GameStop stock. That represents a 46% premium to where eBay's shares traded on February 4 - the day Cohen started buying - and a 20% premium to eBay's Friday close of $104.07. The total undiluted equity value (the price of all shares outstanding, before accounting for stock options or other instruments) is approximately $55.5 billion.
The cash side involves $9.4 billion from GameStop's balance sheet and a "highly confident letter" from TD Securities for up to $20 billion in acquisition financing. A highly confident letter is a bank's indication that it expects to provide the funds - but it is not a binding commitment, and the deal has not cleared regulatory approval. As CNBC anchor Andrew Ross Sorkin pointed out live on air, even combining GameStop's cash with the TD Securities letter produces roughly $29 billion. The offer is $55.5 billion. The remaining gap is to be covered with freshly issued GameStop shares - meaning existing shareholders would own a smaller percentage of a larger company, a process known as dilution.
According to CNBC, eBay's shares rose about 6% after markets opened today to just over $110 - well below the $125 offer price, which signals investor skepticism that the deal closes as structured. GameStop shares fell roughly 5% in early trading.
eBay confirmed receipt of the proposal in a statement, saying its board would "carefully review and consider the unsolicited proposal." It noted, pointedly, that it had "no discussions with or outreach from GameStop prior to receiving the proposal." Cohen, for his part, told CNBC that going public first was deliberate. His explanation was blunt:
"For obvious reasons. eBay is a public company. There's all kinds of perverse financial incentives from the board to the management team. So there's only one way to approach something like this."
The money trail
Follow the incentives and the picture gets sharper.
Cohen's compensation package, announced in January, consists entirely of stock options to purchase 171.5 million GameStop shares at $20.66 each. He receives no salary, no cash bonus, and no severance. The options vest in nine tranches tied to two conditions simultaneously: GameStop's market capitalization (the total value of all its shares) must reach specific milestones, and the company must accumulate enough earnings before interest, taxes, depreciation and amortization - EBITDA - to match. The first tranche vests when market cap hits $20 billion and cumulative performance EBITDA reaches $2 billion. The final tranche, covering $100 billion in market cap, would make the full package worth something in the range of $35 billion at current prices.
GameStop's market cap today sits around $12 billion. Without this deal or something like it, hitting $20 billion would require GameStop - a shrinking video game retailer - to nearly double its stock value organically. With eBay folded in, the combined company's market cap would clear that threshold on day one, just from arithmetic. The CNBC anchors raised this point directly: does Cohen's pay package create an incentive to chase scale through acquisition rather than through building something? Cohen's answer was that he only benefits if shareholders benefit, because his options only have value if the stock price rises. That is technically correct. But it is also true that combining two companies' valuations mechanically clears thresholds that organic growth might take years to reach.
That is not inherently corrupt - it is how leveraged acquisitions work. A company borrows heavily, cuts costs from the target, and hopes the combined entity generates enough cash to repay the debt and grow. Cohen's pitch is that eBay is dramatically under-earning because it is run inefficiently. He put it plainly on CNBC:
"When a business is not growing users and spending 2.5 billion in sales and marketing, there's a lot of fat to cut."
The plan calls for $2 billion in annual cost reductions within twelve months of closing: $1.2 billion from marketing (he argues eBay's brand is already universally known, so heavy ad spending is waste), $300 million from product development (headcount that grew faster than revenue), and $500 million from consolidating back-office functions. According to the press release, those cuts alone would push eBay's earnings per share - profit divided by the number of shares - from $4.26 to $7.79 in year one.
On his own pay, Cohen was characteristically direct: "I don't get any salary, any cash - no golden parachutes, nothing." That is technically accurate. His entire compensation is tied to stock options that only have value if the combined company's market cap and earnings both hit specific targets. Whether those targets are best served by organic growth or by absorbing a bigger company is, conveniently, a question the structure of the package leaves open.
The 1,600 GameStop retail stores also factor into the pitch. Cohen argues they give eBay a physical network for authentication, item intake, and fulfillment - particularly relevant for collectibles, where verifying that something is genuine is often the entire value proposition.
According to Bloomberg, Cohen is prepared to take the deal directly to shareholders in a proxy fight if eBay's board declines to engage - meaning he would campaign among eBay's investors to pressure the board into negotiating, bypassing management entirely.
What people are doing about it
eBay's shareholders have not exactly rushed to endorse the offer. The stock trading at $110 rather than $125 implies that most institutional investors believe either the deal does not close or that a better alternative emerges. A gap between an offer price and where the stock actually trades is called the arbitrage spread, and a wide spread on an announced deal is the market's way of saying: we are not convinced.
GameStop shareholders, meanwhile, sold. Shares fell around 5% on Monday morning. The concern is straightforward: if the stock component of the deal requires issuing many new shares, each existing share represents a smaller slice of the company. Some institutional holders may also be wary of the debt load a merged entity would carry - this deal, if completed, would place tens of billions in borrowings onto a balance sheet currently carrying no legacy debt.
Cohen himself acknowledged on CNBC that eBay's board would almost certainly fortify against the bid immediately:
"I am sure they've hired the most expensive advisory firms and lawyers to help them navigate this."
His timeline for resolution is open-ended. When asked about a proxy fight, he was measured but direct: "We'll do whatever we need to do in order to protect our investment and pursue this. It's a long putt, but there's a lot of upside potential in something like this." According to CBS News, Cohen told the Wall Street Journal he is "thinking about turning eBay into something worth hundreds of billions of dollars."
Retail investors - the crowd of individual buyers who animated GameStop's 2021 moment - have responded with their usual blend of enthusiasm and irony. Comment sections filled immediately with jokes about the CNBC interview, memes about eBay listings for the company itself, and genuine debate about whether the idea is brilliant or absurd. That community's behavior matters, because if enough of them buy GameStop shares, the stock price rises, the market cap climbs, and the stock portion of the deal becomes cheaper to issue in absolute terms.
Antitrust regulators will also have a say. GameStop has already filed an HSR notification - the pre-merger filing required under U.S. law for deals above a certain size - which triggers a mandatory waiting period during which the Federal Trade Commission or the Department of Justice can investigate competitive concerns.
The bottom line
A company that was nearly bankrupt twice in five years is now offering to buy one of the internet's oldest marketplaces at a price that strains every available funding source. The math involves borrowed money, freshly printed shares, and a financing letter from a bank that is not yet binding. eBay's board is under no obligation to say yes. But Cohen owns 5% of eBay and roughly 9% of GameStop, takes no salary, and has structured his entire compensation around making GameStop's market cap explode. Whatever happens next, the incentive to push hard is very much there.
Timeline
- 1995 - eBay founded in San Jose, California, as one of the internet's first peer-to-peer marketplaces
- January 2021 - Ryan Cohen joins GameStop's board; meme-stock frenzy sends GME shares up roughly 1,500% in two weeks
- September 2023 - Cohen appointed CEO of GameStop; accelerates cost-cutting and store closures
- Fiscal 2025 - GameStop reports $418 million net income, SG&A down 47% from 2021 levels; cash and liquid investments reach $9.4 billion
- January 6, 2026 - GameStop announces a performance-based stock option package for Cohen; first tranche requires $20 billion market cap and $2 billion cumulative EBITDA
- February 4, 2026 - GameStop begins quietly accumulating a stake in eBay through derivatives
- May 3, 2026 - GameStop submits non-binding proposal to acquire eBay at $125 per share; files Schedule 13D; Wall Street Journal first reports the offer
- May 4, 2026 - eBay confirms receipt of the unsolicited proposal; board says it will review; Cohen appears on CNBC's Squawk Box in a combative live interview; eBay shares rise 6%, GameStop shares fall 5%
Summary
Who: Ryan Cohen, CEO of GameStop, and eBay's board of directors
What: GameStop submitted an unsolicited, non-binding proposal to acquire 100% of eBay at $125 per share - half cash, half GameStop stock - for a total implied value of approximately $55.5 billion
When: The proposal was submitted on May 3, 2026; eBay confirmed receipt and said its board would review it on May 4, 2026
Where: Both companies are U.S.-listed; GameStop is headquartered in Grapevine, Texas; eBay in San Jose, California
Why: Cohen argues eBay is significantly under-earning due to bloated costs, and that combining it with GameStop's physical retail footprint and his management approach could create a genuine competitor to Amazon - while also, not coincidentally, pushing GameStop's market cap past the $20 billion threshold at which his own compensation package begins to pay out