Quick overview

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GameStop is offering to purchase eBay for roughly $56 billion in cash and stock in an audacious attempt to acquire a legendary e-commerce brand that is several times bigger. For the online marketplace, the gaming retail chain offered $125 per share in cash and stock, which is roughly 20% more than its Friday close.

Shares of both companies increased by more than 15% on the alternative trading platform Blue Ocean following GameStop’s announcement. However, eBay was trading at roughly $117,  significantly less than GameStop’s offer, showing that investors see obstacles to closing a deal. The takeover offer comes after GameStop, a chain of video game stores that reduced its physical locations, unexpectedly rose to prominence.

GameStop, which acquired about 5% of eBay, obtained an initial, non-binding “highly confident letter” from TD Bank to supply roughly $20 billion in debt financing. Cohen’s company promised to find about $2 billion in annual savings within a year of closing, in a memo sent to investors on Sunday.

The takeover offer comes after the unexpected rise of GameStop, a chain of video game stores that reduced its physical presence as more players purchased software from online retailers. It became the focal point of a retail investor frenzy in 2021. By adopting a bullish stance on the company in 2019, Michael Burry, the head of Scion Asset Management, who gained notoriety following a successful bet against mortgages prior to the 2008 financial crisis, contributed to GameStop’s surge.

The takeover offer comes after the unexpected rise of GameStop, a chain of video game stores that reduced its physical presence as more players purchased software from online retailers. It became the focal point of a retail investor frenzy in 2021. By adopting a bullish stance on the company in 2019, Michael Burry, the head of Scion Asset Management, who gained notoriety  a successful bet against mortgages before the 2008 financial crisis, contributed to GameStop’s surge.