Shares of eBay Inc. were gaining around 9% in pre-market activity on Nasdaq after electronics retal company GameStop Corp. announced a non-binding proposal to buy the e-commerce major in a cash and stock deal, with equity value of $55.5 billion.
GameStop announced late Sunday that it has submitted the proposal at $125.00 per share, comprising 50 percent cash and 50 percent GameStop stock, with full shareholder election rights as to consideration type and pro-rata allocation.
The offer represents a 46 percent premium to eBay's unaffected closing price on February 4, 2026, the day GameStop started accumulating its position in eBay. GameStop now holds a 5 percent economic stake in eBay through derivatives and beneficial ownership of common stock.
The company now said the deal value represents a 27 percent premium to the 30-day VWAP and a 36 percent premium to the 90-day VWAP.
The transaction is conditioned on customary closing conditions. GameStop said it is filing a Schedule 13D and HSR notification on Monday.
The company noted that eBay spent $2.4 billion on Sales & Marketing in fiscal 2025 while only adding one million net active buyers to 135 million, a net increase of less than 0.75%.
GameStop expects to deliver $2 billion of annualized cost reductions within twelve months of closing.
This includes around $1.2 billion from Sales & Marketing, around $300 million from Product Development, and around $500 million from General & Administrative.
On cost reductions alone, eBay's earnings per share from continuing operations are projected to increase to $7.79 in year one from $4.26. Beyond cost, GameStop's around 1,600 US retail locations give eBay a national network for authentication, intake, fulfillment, and live commerce, it said.
Following the expected deal closure, GameStop's Ryan Cohen will serve as Chief Executive Officer of the combined company.
In its latest first quarter, ebay in late April reported higher earnings of $512 million or $1.12 per share with revenue growth of 19.4% from last year to $3.08 billion and Gross Merchandise Volume or GMV growth of 18% to $22.2 billion.
Peggy Alford, Chief Financial Officer at eBay, then said, "Our strong first quarter results, characterized by robust GMV and revenue growth, along with healthy earnings, reflect the powerful operating leverage inherent in our business. We remain committed to disciplined execution of our strategic priorities while continuing to allocate capital thoughtfully to drive long-term value and significant returns..."
GameStop expects to fund the cash consideration from a combination of cash and liquid investments on its balance sheet, which totaled around $9.4 billion as of January 31, and third-party acquisition financing. For this, GameStop has received a highly-confident letter from TD Securities for up to $20 billion.
In pre-market activity on Nasdaq, eBay shares were gaining around 9 percent, trading at $113.46.
Meanwhile, GameStop is losing 1.9 percent, trading at $26.00.
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