eBay Has a Most Unlikely Would-Be Buyer

GameStop wants to level up in a way few saw coming: It's trying to buy eBay. The video game retailer said Sunday it has made an unsolicited, nonbinding bid to acquire the e-commerce veteran for $125 a share in a half-cash, half-stock offer that values eBay at about $55.5 billion—a roughly 20% premium to Friday's close. The move comes after GameStop quietly built a 5% stake in eBay and lined up as much as $20 billion in debt financing from TD Bank, plus about $9.4 billion of its own cash, reports CNBC. eBay shares jumped in after-hours trading but stayed below the offer price, signaling doubts the deal will actually go through.

GameStop CEO Ryan Cohen told the Wall Street Journal he wants to turn eBay into a far bigger rival to Amazon and is prepared to take the fight directly to shareholders if eBay's board balks. "EBay should be worth—and will be worth—a lot more money," Cohen said. "I'm thinking about turning eBay into something worth hundreds of billions of dollars." If successful, he would run the combined company and slash about $2 billion in annual costs, largely from eBay's marketing budget, arguing the platform isn't gaining enough users to justify the spend. The pitch also leans on GameStop's 1,600 US stores as physical hubs for eBay's marketplace. Whether GameStop, valued at $12 billion as of Friday, can credibly swallow a company nearly four times its size is now the question facing eBay's board, regulators, and investors.