GameStop Corp. (GameStop) CEO Ryan Cohen is reportedly considering withdrawing the $56 billion acquisition offer for eBay Inc. (eBay), according to sources familiar with the matter. Instead of pursuing a full takeover, Cohen is now contemplating a partnership or joint venture that would allow eBay to leverage GameStop's approximately 1,600 retail locations across the United States.

Such a move could help both companies boost market share in high-margin categories like trading cards and collectibles. The sources also noted that GameStop—as one of eBay's largest shareholders—would seek a board seat at eBay if any form of collaboration is reached.

Since the acquisition proposal was made in May, GameStop's stock price has fallen 28%, while eBay's shares have risen 7.6%. The all-in offer, priced at $125 per share, was structured as 50% cash and 50% GameStop common stock. Last Friday, eBay shares closed at $111.98, giving it a market capitalization of approximately $49.8 billion. Including debt, its enterprise value nears $54 billion.

The sources said GameStop has not made a final decision, and Cohen may still evaluate other alternatives. Representatives for both GameStop and eBay declined to comment immediately.

This acquisition attempt was a bold move for Cohen, who had already taken a 5% stake in the much larger e-commerce company. Since then, GameStop has continued to build its position. According to compiled data, as of July 15, its stake had reached 9.75%, making it eBay's second-largest shareholder, behind only a fund managed by Vanguard Group Inc.

Although GameStop, headquartered in Grapevine, Texas, holds $8.4 billion in cash available for deployment, its market value has shrunk to $8.6 billion. The acquisition proposal emerged after a series of dramatic changes at the video game retailer. The chain has been shrinking its physical store footprint as gamers increasingly shift to purchasing software online.

In 2021, GameStop became the epicenter of a retail trading frenzy. Michael Burry, head of Scion Asset Management—who gained fame for shorting mortgage bonds before the 2008 financial crisis—had taken a bullish stance on the stock around 2019, further fueling GameStop's rally. However, after GameStop made its offer for eBay, Burry said he had liquidated his entire position due to concerns that GameStop might take on too much debt to fund the deal.

Despite eBay's challenges in adapting to shifting consumer preferences, its platform still handles roughly $80 billion in annual transaction volume. In the 12 months ending March 31, about 136 million buyers worldwide made purchases on the platform.