The meme stock that nearly died is now making one of the most audacious corporate bids in recent memory. Here is what is really happening, and why almost nobody thinks it will work the way Ryan Cohen says it will.

by Kasun Illankoon, Editor in Chief at Tech Revolt

Five years ago, GameStop was a punchline. Its stock had cratered, its stores were bleeding customers to digital downloads, and Wall Street had already written its obituary. Short sellers were betting billions that the company was weeks, maybe months, away from the kind of ignominious collapse that had already swallowed Blockbuster and Borders before it. Then Reddit happened. Then Ryan Cohen happened. And now, in what may be the most surreal corporate plot twist in recent memory, GameStop wants to buy eBay.

Not a piece of eBay. Not a partnership. All of it. One hundred percent. For $55.5 billion.

Let that number sit for a moment. GameStop, a company worth roughly $12 billion as of Friday, is making an unsolicited, nonbinding offer to acquire a company nearly four times its size. It is the corporate equivalent of a college student walking into a Ferrari dealership and asking to buy the building.

And yet, here we are.

What GameStop Actually Proposed

On Sunday, GameStop submitted a nonbinding proposal to acquire 100% of eBay Inc. at $125.00 per share in cash and stock. The offer represents a 46% premium to eBay's unaffected closing price on February 4, 2026, the day GameStop started accumulating its position in eBay. GameStop has built a 5% economic stake in eBay through derivatives and beneficial ownership of common stock.

The proposed deal would be split evenly, half cash and half GameStop common stock. GameStop plans to fund the buyout through cash and debt, which includes a commitment from TD Securities for up to $20 billion.

In its offer, GameStop said it would cut $2 billion in annual costs within a year, targeting eBay's bloated sales and marketing budget, which totaled $2.4 billion in fiscal 2025 while net active buyer growth remained flat at less than 0.75%. The company projected that cost reductions alone would lift eBay's earnings per share to $7.79 from $4.26 in the first year. GameStop also pitched its roughly 1,600 U.S. retail stores as physical infrastructure for eBay's marketplace, offering a network for authentication, intake, fulfillment, and live commerce capabilities.

In his letter to eBay's board chair, CEO Ryan Cohen framed the deal as the foundation of something grander: a legitimate competitor to Amazon. That is the headline ambition. Whether it is a credible one is a very different question.

The Improbable Road to This Moment

To understand how GameStop got here, you have to understand the full arc of what Cohen has been doing since he quietly bought a large stake in the company in late 2020 and started publicly pressing management to move faster toward e-commerce. At the time, GameStop was a dying mall retailer with declining foot traffic and no coherent digital strategy. Cohen's intervention, combined with the extraordinary spectacle of Reddit's WallStreetBets community orchestrating a short squeeze that briefly sent GameStop's stock to the moon, turned a distressed retailer into a cultural phenomenon.

The meme stock frenzy of January 2021 was chaotic, emotionally charged, and largely detached from GameStop's actual business fundamentals. But Cohen used the attention and the capital it generated to quietly begin a genuine transformation. He cut costs, closed underperforming stores, and shifted the product mix toward higher-margin collectibles. During his tenure, the company swung from a $381 million net loss in 2021 to $418 million of net income in its latest financial year, ended January 31. He also sat on a war chest. GameStop has about $9 billion in cash on its balance sheet.

That cash pile, accumulated quietly and deliberately, is the foundation of this bid. Cohen has been signaling for months that something large was coming. In January, he told the Wall Street Journal he had a number of companies in his sights and was doing his homework, looking to pursue a big deal. He described it, with characteristic theatrical restraint, as "transformational" and something that had "never been done before within the history of the capital markets." The target, it turns out, was eBay.

Why eBay, and Why Now?

The strategic logic Cohen is pitching, to the extent it holds together, runs something like this: eBay is a giant with a stagnant growth problem, an overstuffed marketing budget, and a physical presence problem it has never solved. GameStop has 1,600 stores across the United States that have been repositioning around collectibles, trading cards, and used goods, categories that overlap directly with eBay's strongest verticals. Combine the two, the argument goes, and you get something with both online reach and physical infrastructure that Amazon, for all its dominance, cannot easily replicate.

After peaking at $100 billion in gross merchandise volume in 2020, eBay's GMV slid to $79.6 billion in 2025, as the platform struggled to retain shoppers. eBay has been trying to address this by leaning into what CEO Jamie Iannone calls "focus categories," including trading cards, collectibles, used luxury goods, and auto parts. In February, the company agreed to buy British online clothing resale platform Depop from Etsy for $1.2 billion, giving it an edge into younger consumers.

In other words, eBay has already been moving in a direction that Cohen believes GameStop can accelerate and monetize more efficiently. Whether that convergence justifies a $55.5 billion price tag is the central question analysts are struggling to answer.

The Skeptics Are Loud, and They Have a Point

Markets responded to the announcement with the kind of split verdict that captures the confusion perfectly. Shares of eBay climbed about 5% on Monday to around $109, well below GameStop's $125 offer, suggesting investors are skeptical the deal will close. GameStop stock sank 10%.

The financing math alone raises serious questions. GameStop has secured a nonbinding highly confident letter from TD Bank to provide about $20 billion of debt financing, and has $9 billion in cash on its balance sheet. The deal would be 50% cash and 50% stock. That still leaves a substantial gap, and analysts are pointing out that Cohen has not explained exactly how it gets filled. He has hinted at bringing in sovereign wealth fund partners, but no names have been disclosed and no commitments announced.

Then there is the question of credibility. eBay is, by most measures, a healthy company. Its stock is up more than 55% from a year ago, and it has been investing seriously in artificial intelligence tools and seller infrastructure.

GlobalData retail analyst Neil Saunders described the proposal as "a David trying to take over a Goliath in order to buy David relevance," adding that eBay is a successful business with a very clear proposition and a clear rationale for existence, whereas GameStop is a company that is grappling with a reason to be around.

Even Michael Burry, the investor made famous by "The Big Short" who holds GameStop shares and has previously praised Cohen's strategic instincts, was sharply critical. Burry said the strategy behind the deal "could not be more pedestrian," arguing it would lead to more debt and shareholder dilution, and he indicated he may sell some or all of his shares by the end of the week.

Cohen's Real Incentive Structure

There is one element of this story that deserves more attention than it has received: Ryan Cohen's compensation package. At the start of this year, the GameStop board adjusted his compensation so that he could earn as much as $35 billion in stock if the company meets certain thresholds, including reaching a market value of $100 billion.

GameStop's current market cap is approximately $12 billion. The gap between where it is and where it needs to be for Cohen to collect his full payout is enormous, and it is difficult to get there through organic growth in video game retail. An eBay acquisition, if it closed, would dramatically expand GameStop's asset base and potentially its valuation.

Cohen acknowledged the incentive in his CNBC interview but downplayed it. "I obviously want to build something much larger," he said, "but I don't benefit unless shareholders benefit."

That may be true in a technical sense. But it is also true that the structure of his compensation creates a powerful personal incentive to pursue transformational deals at scale, even if the market is skeptical.

What Happens Next

In a statement Monday, eBay confirmed it had received the unsolicited proposal from GameStop and said there had been no outreach from the company before the offer was made. The board said it would review the proposal with a focus on value to be delivered to eBay shareholders.

Cohen, for his part, confirmed on CNBC that he had not started any formal conversation with eBay's management before going public. "We are just starting," he said. He has also indicated he is prepared to go hostile if the board resists.

Analysts said even if the GameStop bid ultimately failed, it could draw interest from other potential acquirers, which may itself be part of the calculus. If Cohen cannot close this deal but succeeds in putting eBay in play, a more conventional acquirer with deeper pockets steps in, eBay shareholders win, and GameStop books a profit on its 5% stake. That is not a bad outcome either.

The Larger Question

Strip away the meme stock mythology, the Reddit nostalgia, and the sheer spectacle of a mall retailer trying to swallow an e-commerce giant, and what you are left with is a genuinely interesting strategic question: Is there a version of this that actually makes sense?

The overlap between GameStop's collectibles pivot and eBay's focus categories is real. The gap in physical commerce infrastructure that eBay has never filled is real. The waste in eBay's sales and marketing budget, relative to its user growth, is real and documented in eBay's own filings.

What is not real, at least not yet, is a credible financing plan, a cooperative target, and a track record suggesting GameStop can successfully integrate and operate a business 4x its size in a sector it has never operated in.

Ryan Cohen has surprised people before. He took a company that Wall Street had written off and made it, improbably, profitable. He built a cult following that gives him access to capital markets in ways that conventional executives simply do not have. He may genuinely be building toward something.

But between here and there is a $55.5 billion question, and right now, the market is not convinced he has the answer.