GameStop CEO Ryan Cohen has a bold plan to buy eBay, a much larger company than his. And he’s offering a lot of money—$56 billion, or $125 a share. There’s the rub: eBay stock is hovering around $108, a sign that Wall Street doubts Cohen can pull off the deal. Prominent money manager Bill Smead, whose firm has been an eBay stakeholder for nearly 20 years, is skeptical, too.
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GameStop has made an unsolicited bid worth about $56b to acquire eBay (NasdaqGS:EBAY).
eBay has confirmed it is reviewing the proposal while not yet committing to accept or reject the offer.
The approach has raised questions about deal financing, potential hostile tactics, and the future direction of both companies if a transaction proceeds.
For you as an investor, this development comes on top of an online commerce sector that continues to evolve around third party marketplaces, payments, and logistics. eBay operates a global marketplace connecting buyers and sellers across categories such as collectibles, electronics, apparel, and auto parts, in a market that has seen ongoing competition from large generalist and specialist platforms.
The scale of GameStop’s $56b proposal means governance, deal terms, and any response from eBay’s board could become central issues for NasdaqGS:EBAY. As the review continues, attention is likely to focus on how any outcome might affect eBay’s capital structure, business mix, and the role of its marketplace within the broader online retail sector.
Stay updated on the most important news stories for eBay by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on eBay.
2 things going right for eBay that this headline doesn't cover.
GameStop’s US$56b, partly stock-funded proposal immediately puts a spotlight on eBay’s valuation, governance, and deal risk. The offer values eBay at US$125 per share, with 50% in cash and 50% in GameStop stock, and hinges on GameStop raising up to US$20b of additional financing on top of its US$9.4b cash and liquid investments. For you as a shareholder, that raises two big questions: how dependable the financing really is, and how comfortable you are holding GameStop equity as part of any consideration mix. The fact that Ryan Cohen would run the combined group adds an extra governance and execution angle, particularly given the different profiles of eBay and GameStop compared with players like Amazon and Walmart in online retail.
The bid explicitly leans on eBay’s marketplace, focus categories and recommerce positioning, which lines up with the existing narrative that these areas are central to the company’s story.
Heavy cost-cutting and integration with a large physical retail footprint could challenge assumptions that eBay’s growth path is primarily through product improvements, AI-powered tools and verticalization rather than major corporate restructurings.
The proposal and its financing structure, including potential new debt for the combined entity, do not appear in the current community narrative, which mainly concentrates on operating performance and category mix.
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GameStop (NYSE:GME) has announced an unsolicited bid to acquire eBay in a multi billion dollar transaction.
The offer uses a mix of cash and GameStop stock and leaves a sizeable financing gap that would need to be addressed.
GameStop is signaling a willingness to pursue a proxy contest if eBay’s board rejects the proposal.
For readers, this is a sharp turn for NYSE:GME, which many still associate with physical videogame retail and meme stock trading. eBay operates a large online marketplace focused on consumer to consumer and small business commerce, so the proposed deal would move GameStop deep into general e-commerce. It comes at a time when investors are watching how traditional retailers respond to long running shifts toward online sales and digital ecosystems.
Looking ahead, attention will likely focus on whether GameStop can secure the required funding, convince eBay shareholders of its plan, and manage a complex integration if the bid advances. The outcome could influence how the market views GameStop’s core business model and its role in the broader online retail sector.
Stay updated on the most important news stories for GameStop by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on GameStop.
📰 Beyond the headline: 0 risks and 2 things going right for GameStop that every investor should see.
This bid puts GameStop at the center of the large-platform e-commerce space alongside companies such as Amazon and Walmart, at least in terms of ambition, and moves the story well beyond physical game stores. The proposed US$55.5b to US$56b offer at US$125 per eBay share, half in cash and half in GameStop stock, would create a very different business profile, tied closely to online marketplaces, resale, and collectibles. Management is pitching US$2b of annual cost savings at eBay and tighter marketing efficiency. If achieved, these changes could reshape how investors think about the combined entity’s earnings mix and margin structure.
⚠️ A sizeable funding gap remains even after the US$20b TD Securities debt commitment, so the deal may depend on additional leverage and fresh equity that could be dilutive for existing shareholders.
⚠️ Integrating a much larger e-commerce platform, while running a proxy contest if needed, adds execution and governance risk, especially as some investors, including Michael Burry, have publicly questioned the offer size and leverage.
🎁 If GameStop secures eBay at a 20% premium and achieves its targeted cost cuts, it could gain control of a global marketplace with 135m buyers and a leading position in secondhand apparel and collectibles.
🎁 A successful transaction would tilt GameStop’s profile further toward higher margin online categories and may support management’s goal of building a larger e-commerce group.
Michael Burry has gone sour on GameStop (GME) after the video game retailer made an unsolicited $56 billion bid for online marketplace eBay.
“Wall Street does indeed mistake debt for creativity, and does so constantly,” Burry wrote in a Substack post on Monday. “I of all people should have known.” He said that he sold his entire GME position.
The investor made famous by the film “The Big Short” compared the debt GameStop would take on to the leverage of Wayfair (W) and Carvana (CVNA), companies that nearly collapsed.
The sentiment is a reversal of Burry’s support for GameStop: He had previously said GameStop could pursue the path of an “Instant Berkshire” and become a conglomerate, similar to Berkshire Hathaway (BRK-B), a holding company that buys smaller companies at discounted valuations.
“So much for that,” wrote Burry.
GameStop stock rebounded 3% on Tuesday after falling as much as 10% in the prior session amid questions over the deal’s underlying math and an awkward CNBC interview with chairman and CEO Ryan Cohen.
As for Cohen’s stated goal to make the combined company more efficient Burry said, “Ryan cannot be after fat to cut, if only because no amount of cut fat makes this deal work.”
Burry also dismissed the idea that a combined company would compete with e-commerce giant Amazon (AMZN), which has “been investing in itself at a breakneck pace for decades.”
“Think about what eBay is. It has none of that and is not remotely close physically or temporally,” he noted.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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EBay's (EBAY) board is meeting this week to review the unsolicited $55.5 billion acquisition offer f
Michael Burry sold his entire GameStop position Monday following the company's $55.5 billion eBay bid, which he said would saddle the firm with debt his bullish thesis could not absorb.
The "Big Short" investor disclosed the sale Monday on his Substack, citing debt levels he said were incompatible with the "Instant Berkshire" thesis he had bought into in January. Burry claimed the deal would likely push GameStop's borrowings past the limits any disciplined buyer would accept.
"The Instant Berkshire thesis was never compatible with >5x Debt/EBITDA, never ok with interest coverage under 4.0x," Burry wrote, adding that GME was his “first sale” since starting on the Substack platform.
Burry's move comes as GameStop pursues an unsolicited, non-binding $55.5 billion offer to acquire eBay at $125 per share in a roughly even split of cash and stock. The bid draws on $9.4 billion in cash on hand alongside a $20 billion debt commitment from TD Securities.
GameStop's pivot from meme stock icon to corporate acquirer ran through Cohen's reinvention of the balance sheet, capped by a May 2025 purchase of 4,710 BTC for roughly $500 million.
The firm later pledged 4,709 of those coins to Coinbase as collateral for an over-the-counter covered-call strategy, leaving the position recorded as a receivable instead of as a directly held asset.
Earlier in February, Cohen described an unspecified acquisition plan as "way more compelling than Bitcoin" and declined to rule out liquidating the stash to fund a deal. The Bitcoin position is worth about $368 million, per the company’s Q4 results, making it less than 1% of the eBay bid. The stash’s role in funding the deal remains unclear.
GameStop Makes $55.5 Billion Offer to Acquire eBay
Still, Burry maintained he "supports the effort" behind Cohen's plan to dominate collectibles and resale, conceding that "this play for eBay makes perfect sense" in the eyes of financial markets that reward scale.
His skepticism, meanwhile, was on the financing aspects. The capital markets approach "could not be more pedestrian,” Burry wrote, describing the path as "well-worn ruts on the road to capitalist Hell" and arguing Cohen should have pursued Wayfair, with its "70% of its own last mile deliveries and warehouses all over," as the more logical Amazon competitor.
Burry’s exit comes off as “a cold reminder that the eBay deal is a debt-driven disaster rather than a visionary move,” Ryan Yoon, senior analyst at Tiger Research, told Decrypt.
GameStop submitted an unsolicited $55.5 billion offer to buy eBay, and CEO Ryan Cohen hasn't ruled out selling the company's $368 million bitcoin treasury to fund it. If the deal closes, eBay's 135 million active buyers would be inside a company that holds bitcoin. CoinDesk's Jennifer Sanasie hosts "CoinDesk Daily."
Michael Burry exited his entire GameStop position Monday after the company's unsolicited $55.5 billion bid for eBay convinced him the "Instant Berkshire" thesis he'd been building was dead on arrival.
"Never confuse debt for creativity," Burry wrote in a Substack post announcing his exit, GameStop's first sale since he started writing publicly about the position. The problem, as Burry laid it out is that any path to closing a deal at $125 per share would push leverage to roughly 7.7 times debt-to-EBITDA, a level he described as bordering on distressed. Apparently, his thesis had never contemplated debt above 5x. He cited Wayfair, Carvana, and Bath & Body Works as cautionary examples. "Those are the survivors. They are few."
The mechanics are indeed stark. GameStop's market cap is roughly $12 billion. The eBay offer implies a $55.5 billion purchase price. A $20 billion financing letter from TD Bank is secured, leaving a gap wide enough to park the entire GameStop enterprise value inside twice. Cohen, in a combative CNBC interview Monday, said the company has flexibility to issue equity (which was akin to flashing open his kimono and revealing his Reddit-fed ego) and directed further questions to the company's published materials.
The company's published materials did not answer the questions.
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GME fell about 10% Monday and continued its slide TRuesday morning. That's the market's verdict on a deal where the acquirer is worth roughly a fifth of the target, the financing is incomplete, and the CEO's clearest answer to "how does this work?" was to point at a website.
The more pressing problem for Cohen is that Burry was the only investor of note who bought the Instant Berkshire story. He just publicly torched it.
Retail investors who have maintained their faith in GameStop now need to decide between father figures.
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