GameStop has submitted an unsolicited, non-binding offer to acquire eBay in an all-cash-and-stock deal valued at approximately $56 billion, with a per-share bid of $125. Following the announcement, eBay's stock surged over 13% in after-hours trading, while GameStop shares rose 4%.

GameStop's Chief Executive Officer outlined a strategy to transform eBay into a major e-commerce rival capable of competing with Amazon. The CEO stated that eBay is currently significantly undervalued and has the potential to become a multi-hundred-billion-dollar enterprise.

GameStop, with a market capitalization of approximately $12 billion, is pursuing a target nearly four times its size, as eBay is valued at around $46 billion. To facilitate the acquisition, GameStop has secured a debt financing commitment of up to $20 billion from TD Bank and plans to utilize about $9.4 billion from its cash reserves. The company already holds a 5% stake in eBay.

The proposal requires approval from eBay's board of directors, regulatory authorities, and shareholders. eBay has not yet responded to requests for comment.

The CEO indicated a willingness to bypass eBay's board if necessary and initiate a proxy fight to advance the deal. If successful, the CEO is expected to lead the combined entity.

GameStop's acquisition plan includes reducing eBay's annual costs by $2 billion within the first year, primarily by streamlining sales and marketing expenses. The company projects that these cost optimizations could increase eBay's GAAP earnings per share from $4.26 to $7.79 in the first year.

Additionally, GameStop intends to leverage its network of approximately 1,600 physical stores across the United States to support eBay's e-commerce infrastructure, offering services such as product authentication, warehousing, order fulfillment, and live commerce support.

The CEO recently finalized a new compensation package tied to the company's market valuation and profitability targets. This incentive plan includes stock options that could be worth over $35 billion if the company's valuation exceeds $100 billion and specific profit goals are achieved.

eBay has faced ongoing challenges from Amazon and newer vertical second-hand e-commerce platforms, with its gross merchandise volume declining from a peak of $100 billion in 2020 to $79.6 billion in 2025, amid stagnating user growth.