GameStop CEO Ryan Cohen is drawing fresh attention on Wall Street after eBay rejected his $56 billion unsolicited takeover offer. The bid valued eBay at $125 per share and included a mix of cash and stock, with part of the funding tied to GameStop’s cash reserves and possible debt financing.
However, eBay’s board dismissed the offer as ‘neither credible nor attractive.’ Cohen has since offered limited details on his next step, while bankers, investors, lawyers, and analysts assess whether he can still push the deal forward.
Cohen approached eBay’s board in early May with an offer that would place him at the center of the combined company. The proposal included his services as Chief Executive, while half of the deal would be paid in cash and half in GameStop stock.
GameStop holds about $9.4 billion in cash reserves. It also has a non-binding commitment letter from TD Securities for up to $20 billion in debt financing. However, that financing depends on the combined company securing investment-grade credit ratings, which some analysts have questioned.
Cohen added more uncertainty when he gave limited answers in recent interviews about how GameStop would fund a takeover of a company nearly five times larger than itself. He said he would do ‘whatever we need to do’ to buy eBay but did not provide a detailed financing plan.
Meanwhile, eBay shares have gained 32% this year, giving the company a market value of about $51 billion. The company also reported strong first-quarter earnings, citing growth in areas such as collectibles, memorabilia, toys, and other categories.
One possible route for Cohen would be a tender offer, where GameStop would go directly to eBay shareholders instead of relying on the board. Bankers, lawyers, and analysts said this option could increase pressure, although they also described it as difficult.
A tender offer would require Cohen to persuade major eBay shareholders, including Vanguard, BlackRock, and State Street. Together, the three firms own more than 22% of eBay through index funds. Analysts said these investors rarely support hostile bids without strong deal certainty.
Don Bilson, head of event-driven research at Gordon Haskett, expressed doubt over that strategy. “There is zero chance that a tender offer works,” Bilson said, adding, “no eBay shareholder would opt into this.”
Paramount Skydance recently used a tender offer to pressure Warner Bros Discovery into talks, even after earlier rejections. Still, analysts noted that GameStop’s case differs, as Cohen must solve questions around funding, shareholder support, and eBay’s current performance.
Another option would be a special meeting to elect directors more open to Cohen’s offer. However, GameStop would need more voting power to take that step.
GameStop recently said it has 6.6% in economic exposure to eBay, up from about 5%. Yet most of that exposure comes from derivative positions tied to 29 million shares. Those positions would carry voting rights only if physically settled. GameStop owns just 25,000 eBay shares outright, or about 0.006% of the company.
Even if the derivatives convert into voting shares, GameStop would remain far below the 20% common-stock stake usually needed to call a special meeting. GameStop has also asked its own investors to authorize an increase in shares from 1 billion to 2.5 billion, raising speculation that Cohen may want more stock available for future moves.
Mark Cohen, former director of retail studies at Columbia Business School and former CEO of Sears Canada, questioned the plan. “If he had the capacity to mount a proxy fight he might get away with it, but he doesn’t,” he said. “He’s got enough money to make the claim but not enough money to make his claim stick.”
For now, Cohen may continue applying public pressure on eBay’s board. He has criticized the company in interviews, while analysts point to eBay’s 31% operating profit margin last fiscal year. Wall Street now awaits whether he raises his offer, seeks more voting power, or waits for a better opening.
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