Cohen Defends $125 Offer for eBay Amid Rejection
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 14 2026
0mins
Source: stocktwits
- Acquisition Proposal Defense: In an exclusive interview with Piers Morgan, Cohen reiterated his non-binding $125 per share offer for eBay, dismissing the company's rejection of his nearly $56 billion bid, asserting that shareholders would retain ownership of the combined entity while benefiting from improved execution.
- Financial Capability Analysis: Cohen highlighted GameStop's $9.4 billion cash position and the willingness of banks to provide approximately $20 billion in financing, showcasing the potential for the acquisition despite GameStop's market capitalization being only around $12 billion.
- Management Criticism: Cohen sharply criticized eBay's leadership, labeling them as “losers” and accusing them of prioritizing their own interests over shareholder value, arguing that the outdated operational platform and high expenses are detrimental to profitability.
- Market Sentiment Shift: On Stocktwits, retail sentiment for GME shifted from 'neutral' to 'bearish', while eBay's sentiment fell from 'bullish' to 'neutral', indicating investor concerns regarding Cohen's acquisition plans, although some users remain optimistic about the deal's potential.
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Analyst Views on GME
About GME
GameStop Corp. offers games and entertainment products through its stores and ecommerce platforms. The Company operates in four geographic segments: United States, Canada, Australia and Europe. Each segment consists primarily of retail operations, with the significant majority focused on games, entertainment products and technology. The Company has a total of approximately 3,203 stores across all of its segments: 2,325 in the United States, 193 in Canada, 374 in Australia, and 311 in Europe. Its stores and ecommerce sites operate primarily under the names GameStop, EB Games and Micromania. Its Australia and Europe segments also include 38 pop culture-themed stores selling collectibles, apparel, gadgets, electronics, toys and other retail products for technology enthusiasts and general consumers in international markets operating under the Zing Pop Culture brand. Its retail stores are generally located in strip centers, shopping malls and pedestrian areas.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Funding Strategy: GameStop plans to leverage its $9.4 billion cash and liquid investments, along with a financing letter from TD Securities for up to $20 billion in debt, to support this massive e-commerce acquisition, reflecting strong confidence in the deal.
- Cost Reduction Potential: CEO Ryan Cohen asserts that a merger could eliminate $2 billion in annual operational costs within 12 months post-closing, enhancing the strategic rationale behind the acquisition.
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- Derivative Contract Details: The derivatives have strike prices ranging from $84.74 to $118.28 per share, and these contracts could convert into actual shares pending federal clearance under the Hart-Scott-Rodino Act, showcasing the company's potential future control over eBay.
- Acquisition Proposal Rejected: Despite GameStop's $56 billion acquisition proposal, eBay has firmly rejected it, labeling the offer as “neither credible nor attractive,” reflecting skepticism in the market regarding GameStop's acquisition capabilities, especially given its market value of only about $10 billion.
- Management Criticism and Market Reaction: CEO Cohen has criticized eBay's operational style, calling for nearly $2 billion in annual expense reductions, while GME stock has gained nearly 8% this year, contrasting with EBAY's over 28% rise, highlighting differing market perceptions of the two companies' futures.
See More
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- Acquisition Proposal Rejected: GameStop CEO Ryan Cohen's unsolicited $56 billion bid to acquire eBay at $125 per share was dismissed by eBay's board as 'neither credible nor attractive,' presenting significant hurdles for Cohen.
- Complex Financing Plan: Cohen aims to leverage GameStop's $9.4 billion cash reserves and a $20 billion debt financing commitment from TD Securities to support the acquisition, yet analysts question the feasibility of securing investment-grade credit ratings for financing.
- Special Meeting Possibility: Cohen may consider calling a special meeting to elect new directors more favorable to his acquisition proposal, but GameStop currently holds only about 0.006% of eBay's shares, far below the typical 20% threshold required.
- Public Pressure Strategy: Cohen has begun publicly pressuring eBay's board, stating the company 'needs to lose weight,' although analysts highlight that eBay achieved a 31% operating profit margin last year, significantly higher than GameStop's 10%.
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- Valuation Comparison: GameStop's forward P/E ratio stands at 40.4x with a P/S ratio of 2.7x, compared to Roblox's 20.2x P/E and 6.8x P/S, indicating a more conservative valuation for GameStop, appealing to risk-averse investors.
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- Profitability Improvement: GameStop achieved $3.6 billion in revenue for fiscal 2025, a 5.1% decline from the previous year, yet reported a net income of $418.4 million with a net margin of 11.5%, indicating significant progress in cost optimization and profitability enhancement.
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