TLDR
- GameStop CEO Ryan Cohen made an unsolicited $56 billion offer to acquire eBay at $125 per share
- GME stock dropped ~8.5% Monday while eBay (EBAY) rose ~6% on the news
- The offer is half cash, half stock, with GameStop potentially issuing over one billion new shares
- Baird analyst Colin Sebastian rates the deal a “relatively low probability of success”
- The $125 offer represents a 20% premium to eBay’s Friday close of $104.07
Ryan Cohen made his move over the weekend — and Wall Street is not impressed.
GameStop (GME) stock dropped around 8.5% on Monday after the company confirmed it made an unsolicited, non-binding offer to acquire eBay for $56 billion, or $125 per share. GME was trading around $24.33 by mid-morning. eBay (EBAY) moved in the opposite direction, climbing roughly 6% to just over $110.
The offer is split evenly between cash and GameStop stock. Cohen told CNBC’s Squawk Box: “We are offering half cash, half stock, and we have the ability to issue stock in order to get the deal done.”
The $125 per share offer represents a 20% premium to eBay’s Friday close of $104.07. It also represents a 46% premium to eBay’s closing price on February 4 — the date GameStop began building its stake in the company.
eBay confirmed it received the proposal and said its board would review it. Cohen has made clear he is prepared to take the offer directly to eBay shareholders if the board rejects it.
Despite eBay’s positive move, the stock sitting well below the $125 offer price tells its own story. Investors are skeptical the deal gets done. GameStop’s current market cap sits just under $12 billion. eBay’s is $46 billion.
The Financial Math Raises Flags
To fund a deal of this size, GameStop would need to issue more than one billion new shares and take on up to $20 billion in new debt. That combination is what’s hitting GME stock hard — investors are worried about dilution and balance sheet strain.
Baird analyst Colin Sebastian isn’t buying the logic of the deal. He argues “the core issue is direction, not valuation,” and warns the proposal assumes eBay would pivot away from a technology-led growth strategy toward cost-cutting — a shift he says “would be a more practical option if eBay had not returned to growth.”
Sebastian acknowledges the transaction “screens as accretive” on paper, but pushes back on the quality of those numbers. He says the gains are “driven by financial engineering rather than operating synergies,” which creates longer-term risks around competitiveness.
He also raised the possibility of a “poison pill” defense from eBay’s board, adding another layer of risk to the deal closing.
Overlap and Ambition
Sebastian does note some logic to the combination. Both companies have exposure to collectibles, gaming, and pre-owned goods, and there is “some opportunity” to develop seller services using GameStop’s physical retail presence.
He also frames the move as part of Cohen’s broader ambitions — suggesting it could help build out higher-margin services and expand into adjacent platforms where AI is becoming “mission critical.”
But those potential upsides are not enough to change his bottom line. Sebastian assigns the deal a “relatively low probability of success.”
Year to date, GME was up around 28-32% heading into Monday’s session. eBay had gained close to 20% over the same period.
eBay’s board has yet to formally respond to the proposal beyond confirming receipt.
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