The CEO of GameStop (NYSE: GME), Ryan Cohen, has announced the withdrawal of a compensation package that could have been worth up to $35 billion upon achieving specific performance targets. Cohen stated this move is to fully focus on advancing the acquisition proposal for eBay (NASDAQ: EBAY).

Since eBay rejected the takeover proposal in May, Cohen has disclosed almost no concrete plans for progressing this $56 billion acquisition.

Initial Considerations

This week, the CEO of the meme-stock darling retailer reaffirmed to Wall Street his unwavering commitment to acquiring eBay, yet again failed to outline how the deal would be executed.

The company announced on Tuesday that its board approved Cohen's request to withdraw a previously proposed bonus incentive plan. Under the original plan, Cohen could have received up to $35 billion in compensation upon meeting set performance milestones.

This marks the first significant development regarding the acquisition since Cohen's bold $56 billion proposal for eBay in May. The proposal was immediately rejected by eBay's board, which labeled it as lacking credibility and appeal. This view is widely shared across capital markets, considering GameStop's market capitalization of approximately $10 billion.

Challenges in the Acquisition Strategy

Appointed CEO in 2023, Cohen led GameStop to profitability through aggressive cost-cutting but has failed to dispel market skepticism. When the acquisition plan was announced, GameStop only mentioned having a $20 billion financing indication letter from TD Bank, without explaining how the remaining funding gap would be filled.

In a firm interview, Cohen stated the acquisition would be structured as half cash and half stock, suggesting the company could issue new shares to facilitate the deal. GameStop shares fell 10% on the day the acquisition news broke and have remained weak since.

Cohen has now formally withdrawn the high-value bonus plan announced in January to refocus efforts on the acquisition. One stringent condition for receiving the full $35 billion award was to increase GameStop's total market capitalization to $100 billion.

The company stated in Tuesday's announcement that "Mr. Cohen expressed his desire for management to focus entirely on GameStop's operational performance and the proposed acquisition of eBay." GameStop said it will release a detailed presentation this week explaining the strategic logic and operational plan behind the acquisition.

Persisting Core Questions

Eden Chen, CEO of gaming software company FirstLook and former investment analyst at venture firm Andreessen Horowitz, noted that canceling the large compensation package at least alleviates one major market concern: the suspicion that Cohen initiated the acquisition primarily to secure a massive bonus.

Chen explained, "The compensation package was deeply tied to the company's market cap target. If a merger with a much larger entity like eBay were completed, GameStop's market cap would likely reach the target quickly." GameStop responded in its Tuesday announcement that the board approved the incentive plan before the company decided to pursue the eBay acquisition.

Nevertheless, Chen believes Cohen still has not answered the most critical question: How can a company with a $10 billion market cap acquire a giant worth $50 billion?

eBay did not respond to requests for comment.

Market Confidence in eBay's Trajectory

Cohen's acquisition proposal has received no positive response from eBay. The e-commerce company founded in 1995 is undergoing a strategic transformation, focusing on its strengths in categories like trading cards, auto parts, and collectibles.

Investors largely endorse this strategy, with eBay shares surging 41% in 2025 and gaining another approximately 25% year-to-date in 2026. Citizens Bank analysts rate eBay as Outperform, stating in a May report that the company has strong momentum and is successfully focusing on categories where it holds a competitive advantage.

Regarding the May acquisition offer, eBay's board expressed full confidence in its current management team, citing steady operational growth in recent years. Core reasons for rejecting the offer included uncertainty over the acquirer's financing, operational risks from integration, and concerns about management transition.

Sky Canaves, principal analyst at market research firm eMarketer, stated via email, "Cohen has yet to provide convincing solutions to address these concerns."

Ongoing Advocacy and Legal Scrutiny

Cohen has not remained silent, however, continuing to defend the proposal publicly and on social media platform X, which has also forced eBay to file related disclosure documents with the SEC multiple times.

Cohen, the founder of pet e-commerce company Chewy, stated on Tuesday's "All-In Podcast": "The businesses of the two companies have strong synergies, and this acquisition is within my capabilities. I simply cannot let go of this deal."

In the interview, Cohen revealed he is prepared to personally invest $500 million into the acquisition, but this amount is a drop in the bucket compared to the massive funding gap.

Brian Quinn, a professor at Boston College Law School, believes Cohen's acquisition proposal is essentially a farce for eBay.

Quinn wrote via email, "Unless GameStop can produce a massive amount of cash, this acquisition offer is just about taking eBay on the volatile rollercoaster ride of a meme stock. No rational corporate board would want to be involved in that."

Compensation Controversy and Legal Action

Even setting aside the acquisition controversy, Cohen's enormous compensation package had previously drawn criticism.

Earlier this month, the City of Pontiac General Employees' Retirement System filed a class-action lawsuit in Delaware, seeking to halt a shareholder vote on the compensation plan until the company's board provides complete and compliant disclosure regarding the incentive plan. The package was originally scheduled for a shareholder vote at GameStop's annual meeting on July 7.

GameStop argued in regulatory filings that the lawsuit lacks legal merit and that the company will actively defend its rights.

Assessing the Strategic Move

Paul Nary, an assistant professor of management at the University of Pennsylvania's Wharton School, stated that Cohen's voluntary withdrawal of the compensation package demonstrates his sincerity about acquiring eBay, but numerous details of the deal still need to be finalized.

Nary analyzed via email: "Cohen signaling his increased commitment to the acquisition by giving up a massive pay package may be enough to prove his genuine intent to pursue the deal. However, whether this acquisition will ultimately create value for all GameStop shareholders remains an open question."