Meme stock GameStop bids $56 billion for eBay to take on Amazon

US video game retailer Gamestop Announced on Sunday that it had made an unsolicited, non-binding offer to acquire EBAY For $125 a share in cash-and-stock deal, the e-commerce platform is valued at about $55.5 billion.

The offer, divided equally between cash and GameStop common stock, represents a 20% premium over eBay’s Friday closing price of $104.07 and a 46% premium over its closing price in February.. 4 – When the gaming retail giant began building a stake in the company, GameStop said in its statement.

eBay shares rose 13.4% in after-hours trading to about $118. GameStop, which became a so-called “meme stock” during the retail frenzy of 2021, saw its shares jump nearly 4% to $27.6 a share.

The announcement was made by GameStop Chief Executive Ryan Cohen. wall street journal He saw a way to make the e-commerce company a huge competitor Amazon.com.

“eBay should be and will be very highly valued,” Cohen said. “I’m thinking about turning eBay into something worth hundreds of billions of dollars.”

GameStop has built a roughly 5% stake in eBay and has received a commitment letter from TD Bank for up to $20 billion in debt financing to make the deal possible. statement. The remainder of the deal will be funded from its approximately $9.4 billion cash pile.

The proposal is subject to the approval of eBay’s board of directors, regulators and shareholders of both companies. eBay did not immediately respond to CNBC’s request for comment.

Both companies have struggled to adapt to changing consumer preferences, and it’s unclear whether eBay’s board will view GameStop — whose own market capitalization was about $11 billion before the news broke — as a credible acquirer for a company four times its size.

GameStop had a market cap of $12 billion as of Friday, according to LSEG data, while eBay had a market cap of about $46 billion, raising questions about the feasibility of the bid.

Cohen told the Journal he is prepared to take the proposal directly to shareholders in a proxy fight if necessary. If the deal is completed, Cohen is expected to serve as chief executive officer of the combined company, according to a GameStop statement.

In its proposal, GameStop said it would cut $2 billion in annual costs within a year, targeting eBay’s increased sales and marketing budget, which totaled $2.4 billion in fiscal 2025, while net active buyer growth remained steady at less than 0.75%.

“More spending is not generating more users in a market with almost universal brand recognition,” the statement said.

The company estimated that cost cuts alone would increase eBay’s earnings per share, measured under standard U.S. accounting rules, from $4.26 to $7.79 in the first year.

GameStop offered its approximately 1,600 US retail stores as physical infrastructure for eBay’s marketplace, offering a network for authentication, intake, fulfillment and live commerce capabilities.

Cohen first hinted at a plan to acquire a publicly traded consumer company even larger than GameStop in January, telling CNBC at the time that the deal would be “transformational” and “never done before in the history of capital markets.”