Is GameStop considering a $56 billion acquisition of eBay, and could it succeed as a “small snack, big meme stock”?

Meme stock GameStop Corp. recently proposed acquiring e-commerce platform eBay for approximately $56 billion in cash and stock, drawing intense attention from financial markets. CEO Ryan Cohen has proposed an acquisition price of $125 per share, a premium of about 20% over eBay’s Friday closing price. Currently, GameStop’s market cap is about $12 billion, far below eBay’s $46 billion—this “small bites, big gain” deal shows its ambition to aggressively transform. However, market analysts remain cautious about the likelihood of success, pointing to significant share dilution and execution risks.

GameStop, small bites, big gain—seeks to acquire eBay

According to Bloomberg, GameStop’s proposed deal is valued at roughly $56 billion and would use a mix of cash and stock. Specifically, GameStop has offered $125 per share, which is about a 20% premium compared with eBay’s recent market closing price. In terms of funding sources, besides the company’s own cash of about $9 billion, GameStop has also secured a commitment from TD Bank to provide roughly $20 billion in debt financing to support the transaction. In addition, GameStop has already acquired about 5% equity in eBay on the open market. If the two management teams fail to reach an agreement, Cohen has said he would not rule out launching a proxy fight to seek support directly from eBay shareholders.

CEO Ryan Cohen’s transformation strategy

One of the key logics behind this merger and acquisition is the business transformation and overlap between the two companies in recent years. With the rise of digital gaming, the physical game retailer GameStop has faced pressure to transform, gradually shrinking its physical store footprint and shifting its operational focus toward items such as collectible toys and trading cards. At the same time, e-commerce platform eBay has also been actively developing the market for secondhand goods and collectibles, creating significant overlap in business areas. Cohen told the media that he hopes to integrate resources to build the merged company into a giant with value in the thousands of billions of dollars. The company also expects that within 12 months after the acquisition closes, it can achieve annual cost savings of $2 billion through operational optimization.

Analysts warn of share dilution; retail investors are optimistic

Although GameStop’s management team is optimistic about the deal, evaluations from market professionals are relatively conservative. Bloomberg analysts noted that although the two companies do have overlap in collectibles and resale businesses, the overall probability of reaching a deal is low. The analysts emphasized that because GameStop’s market cap is only about one quarter of eBay’s, any acquisition plan that is feasible would inevitably lead to substantial share dilution for GameStop’s existing shareholders.

Still, many retail investors have expressed support. Most bullish views focus on CEO Cohen’s past experience successfully operating an e-commerce platform. Investors expect that by combining GameStop’s distribution advantages from its physical stores with eBay’s large online platform, it could significantly strengthen competitiveness for both sides in areas such as collectibles, product authentication, and live commerce. Supporters believe this strategy would help GameStop escape the troubles of physical retail and has the potential to challenge major retail giants. After the news broke, it also drove the two companies’ stock prices to show double-digit gains in after-hours trading.

Can this meme stock deal—GameStop’s proposed $56 billion acquisition of eBay—have a chance to succeed? This first appeared on Lian News ABMedia.