GameStop inventory is all of the sudden up by about 13% as a result of merchants are reacting to a reported plan that sounds nearly absurd on paper: GameStop (NYSE: GME) could attempt to purchase eBay (NASDAQ: EBAY).
The retailer was value round $11 billion at Friday’s shut. EBay was value about $45 billion. That isn’t a normal-sized hole. That could be a market story with chaos baked into it.
Allegedly, GameStop has been quietly shopping for eBay shares earlier than a attainable supply. EBay jumped greater than 10% after hours Friday after The Wall Road Journal reported the plan.
eBay has its personal momentum. Its shares are up greater than 50% over the previous 12 months because it focuses on core classes like collectibles and vogue. In February, eBay agreed to purchase secondhand vogue market Depop from Etsy (NASDAQ: ETSY) for $1.2 billion.
The GameStop-eBay bid may come later this month if the corporate strikes forward. If eBay rejects talks, Ryan Cohen may take the supply straight to eBay shareholders. The phrases are nonetheless unknown.
Cohen pushes GameStop past video games as traders value in a attainable eBay combat
Ryan has already made it clear that he desires a big transaction. In late January, he advised The Wall Road Journal he was attainable targets, principally in shopper and retail. The purpose was to maneuver GameStop past video video games and collectibles. That’s the reason the inventory moved so exhausting. Buyers aren’t simply buying and selling previous retailer gross sales. They’re buying and selling a attainable rebuild of the entire firm.
The board modified Ryan’s pay bundle firstly of the yr. The brand new setup offers him extra purpose to lift market worth and profitability. He may obtain as much as $35 billion in inventory if sure targets are met, together with a $100 billion market worth. That quantity is big beside GameStop’s current valuation, nevertheless it matches the dimensions of the reported eBay swing.
GameStop shares are already up about 30% this yr. A part of that acquire got here from curiosity in Ryan’s deal plans. Michael Burry, the investor recognized from The Massive Brief, has additionally been shopping for shares. He has argued on Substack that GameStop ought to use its money pile for transformative acquisitions. That is the place the meme-stock crowd, the money steadiness, and the merger thought all crash into the identical commerce.
GameStop makes use of money, bitcoin, and margin good points to assist a much bigger acquisition plan
GameStop had about $9 billion in money on the finish of March, up from $4.8 billion a yr earlier. Throughout money and marketable securities, the pile is now above $9 billion. A few of that cash had been invested in bitcoin, which makes the funding query particularly related for crypto readers.
When requested if GameStop would promote its bitcoin to assist pay for acquisitions, Ryan mentioned he was “not ready to say.” He additionally known as the brand new technique “far more compelling than bitcoin.”
The working numbers have additionally modified since Ryan took over within the fiscal 2023 third quarter. By fiscal 2025 third quarter, gross margin had improved by 7 share factors. Web revenue reached $77.1 million, in contrast with a $3.1 million loss earlier. The corporate additionally posted annual earnings in fiscal 2024 and 2025 after 5 straight yearly losses.
Burry described the setup bluntly in a Monday Substack put up. “Ryan is making lemonade out of lemons,” he wrote. “He has a crappy enterprise, and he’s milking it greatest he can whereas benefiting from the meme inventory phenomenon to lift money and look ahead to a chance to make a giant purchase of an actual rising money cow enterprise.”
Ryan has in contrast the plan with Berkshire Hathaway (NYSE: BRK.A, BRK.B), however on a quicker clock. “It’s much like Berkshire Hathaway, besides what Berkshire did in many years, we’re making an attempt to do in a a lot shorter time,” he mentioned.
Ray had additionally mentioned GameStop may use the Chewy (NYSE: CHWY) and GameStop mindset of “brutal effectivity” to lift revenue rapidly, seize worth from an “underneath optimized asset,” and later transfer to a different one.
