How GameStop went from struggling retailer to eBay bidder

GameStop CEO Ryan Cohen, who previously led pet marketplace Chewy, told The Wall Street Journal that GameStop had built a roughly 5% stake in eBay and had a commitment of up to $20 billion in financing from TD Bank. If eBay isn’t receptive, Cohen said he was prepared for a proxy fight, according to the outlet.

“I’m thinking about turning eBay into something worth hundreds of billions of dollars,” Cohen told the Journal. “It could be a legit competitor to Amazon.”

It’s still unclear how exactly GameStop, at a fraction of eBay’s size, would secure all the money needed for the transaction. GameStop representatives did not respond to a request for comment for this story.

The bold move from Cohen exemplifies how, over the past six years, GameStop has repositioned the company from one struggling with lower physical video game software and hardware sales to one with far bigger ambitions, arguably beyond its scope. GameStop’s annual net sales had fallen 21% from 2018 to 2019, and the company reported a net loss of of $464.4 million in fiscal 2019.

Cohen joined the board of GameStop and became chairman in 2020, about a year before the company became known as a “meme stock,” attracting the attention of casual investors on Reddit. The GameStop investing craze was possibly at least in part a result of Cohen’s erratic behavior on Twitter, where he would entice people by, for example, posting an image of an ice cream cone with the caption being solely a frog emoji.

Cohen became GameStop’s CEO in 2023 and proved he was bigger than just talk. He managed to cut costs, improve profitability and grow its collectibles business, despite sagging sales, according to CNBC.

Under Cohen’s tenure, the company grew its gross margin by 7 percentage points and its net income to $77.1 million, CNBC reported, adding that it posted two consecutive years of net income growth in 2024 and 2025 after five straight years of losses. GameStop has also amassed more than $9 billion in cash, which it hopes to use to help fund the eBay deal.

Building a niche in collectibles

The proposed eBay deal comes after Cohen has turned GameStop into much more of a collectibles powerhouse, a commonality between the two companies. From fiscal 2019 to 2025, its collectibles business grew from $737.5 million in net sales to just under $1.1 billion. It’s now almost a third of GameStop’s business, up from just 11% in 2019.

People who grew up with Pokémon cards, baseball cards or action figures in the ‘80s and ‘90s now have adult money and are getting back into buying those things, plus younger people are interested in anime and trading card games like Magic: The Gathering.

The eBay proposal shows “these companies are looking at this space and taking it seriously,” said Jeremy Allen, chief collectible officer at Oh Yaas, a startup that manufactures trading cards that can be scanned to unlock digital content.

“You see these big companies and these big investors looking at the different businesses around collectibles and trying to figure out which ones are stable ones for them to invest in and buy in,” Allen said, noting that collectibles events company Collect-a-Con was acquired this year for an undisclosed price.

GameStop is also known to carry higher-ticket items that wouldn’t sell at big-box retailers, such as boxes of trading cards that can sell for hundreds if not thousands, Allen said. GameStop additionally hosts in-store events and tournaments for trading card games such as Pokémon and Magic: The Gathering.

Cohen imagines the eBay deal boosting GameStop’s efforts in the space. He told The Wall Street Journal that GameStop stores could serve as collection and authentication points for items from eBay sellers. Allen said this would be a good way for eBay to reduce fake or counterfeit items on its marketplace as well as bring more people into GameStop to buy over-the-counter items or participate in tournaments.

“Trust and transparency is the most important thing here,” Allen said.

Frustrations toward eBay

The eBay deal would give Cohen the opportunity to regain sellers’ trust in eBay after they may have lost confidence in the platform.

“If the GameStop team is serious and they are able to acquire it, and then they are able to make a bunch of changes to eBay to make it a legit competitor for Amazon, then, yes, that would be fantastic,” said Owen Carr, chief merchandising officer for e-commerce accelerator Spreetail. The company has been selling on eBay since 2006. “There are just not the eyeballs [on eBay] that we have on other channels, such as Amazon, Target, Walmart and even Home Depot.”

Carr said his company has watched its traffic on eBay listings sink over the past few years and that the platform has become more of a niche platform for buying and selling collectibles than a marketplace people would go to for everyday purchases.

“There was a time when eBay, for many years, was our biggest channel. … Now, there are some days when we question if eBay is even in our top five or six channels,” Carr said.

Instead, shoppers are going to Amazon, Walmart, Target or The Home Depot to shop, Carr said, adding that eBay will have to focus on initiatives and promotions that change the company’s perception among consumers.

“At least from the large sellers, we are all dissatisfied with eBay’s performance over the last several years, in terms of how our business is growing there,” Carr said. “If there are any changes that can give us a shot to improve that, then we would be very excited to support [them].”

An aggressive, ambitious vision

It remains to be seen what a combined company would look like, if it ever happens, given the financial uncertainty.

Neil Saunders, managing director and retail analyst at GlobalData Retail, said the deal lacks a clear path to financing and inherent logic as to how the acquisition would benefit GameStop in the long term.

“The deal is very audacious,” Saunders said. “The bid seems rather vague, and it seems a bit half-cooked. I don’t think that bodes well for trying to convince the investors or the board of directors of eBay that this is the right move for the future.”

Cohen would remain CEO of the combined business and plans to make major cuts. GameStop hopes to cut about $1.2 billion in annual sales and marketing spending, $300 million from product development, and another $500 million in finance, HR, real estate, legal, IT and professional services across the combined company, according to a news release.

Cohen had been teasing such a major acquisition of a consumer company since January. “It’s gonna be really big. Really big. Very, very, very big,” he told CNBC earlier this year, before eBay was named as a target. “It’s transformational — not just for GameStop, but ultimately, within the capital markets. … This is something that really has never been done before within the history of the capital markets.”

Saunders said that while he expects Cohen to make bold moves, he doesn’t necessarily think he would be the right next step in leadership for eBay and criticized Cohen’s decision to cut marketing spend.

“Marketing doesn’t just buy new customers, it actually retains and activates existing ones,” Saunders said. “If you cut that marketing spend, you’re likely to find that your existing customers are less active on the site, or maybe they drift over to competitors, of which there are now many.”

Saunders also said that while GameStop has become more stable, it still doesn’t have a clear path into the future. The company’s net sales declined 5% from fiscal 2024 to 2025. He also added that it’s unrealistic for GameStop and eBay to develop the logistical capabilities to compete with Amazon or Walmart, nor the reliability and accuracy.

“There is an opportunity for eBay to be bigger, maybe to be a bit bolder, a bit more imaginative, but we haven’t really seen the strength of the thinking as to how that can be engineered,” Saunders said. “Therefore, I don’t really think that Ryan or Gamestop would be a very good steward of eBay.”