Traders on Reddit have made Gamestop a meme campaign. What do they write about plans to buy eBay?
eBay board urges shareholders to take no action on GameStop's offer to buy the online platform / Photo: Stefano Chiacchiarini '74 / Shutterstock.com
Ryan Cohen, CEO of GameStop, an American chain of video game stores, wants to buy eBay: he has offered $56 billion - a price at a 46% premium to the price at which GameStop began buying eBay securities in February. GameStop shares fell more than 10% in trading on May 4, while eBay was up 7%. GameStop and Ryan Cohen have made a name for themselves, thanks to retail investors on Reddit. We explore what they're expecting from this deal now.
A company that was saved by Reddit investors
GameStop and Ryan Cohen himself are Wall Street legends. GameStop is an American video game store chain and the hero of the 2021 meme rally. Back then, retail investor Roaring Kitty on Reddit drew attention to the large number of shorts in the company's stock, and a flash mob with memes and calls to buy began.
This triggered a short-squeeze: funds that were betting on the fall were forced to buy back shares urgently to close their positions, thus driving up the price even more. GameStop's stock rose dozens of times in a short period of time, and some major hedge funds suffered multi-billion dollar losses. Ryan Cohen was the face of the investor meme movement and then took over the company and is still trying to turn it from an unprofitable retailer into a more sustainable business.
Pokemon hunting: why GameStop needs eBay
eBay owns TCGplayer, the largest online marketplace for selling collectible cards. On an April 29 call with investors, eBay CEO Jamie Iannoni said:
The collectibles category was the largest contributor to total sales growth in the first quarter, reflecting the overall growth momentum in the category. The 30th anniversary of Pokémon at the end of February generated significant enthusiasm that translated into strong demand on our platform, which we supported with coordinated activities on our main marketplace, eBay Live, TCGplayer and Goldin.
This has not gone unnoticed by retail investors.
User Rebal771 writes on Reddit that Gamestop's goal is to monopolize the collectible card market in the US. :
The two main marketplaces are eBay and TCGplayer... which eBay owns. Given their recent investment in the graded card market... and the just insane amounts of money they spend buying such lots at shows... at this point, it seems pretty obvious. Pokémon cards actually saved GameStop. Not video games.
GameStop sells Pokémon products - those very TCG collectible cards - as well as games and merch. According to the 2025 report, sales of collectibles brought the company $1.06 billion - almost a third of its revenue. By comparison, video game sales brought in $729 million (20% of the total).
User itsthebear writes that the logic behind the deal isn't entirely crazy: GameStop has amassed a lot of cash, made a smart pivot to collectibles, and now wants to add the largest online marketplace for collectors to its business. In his words, GameStop has "gone from being a laughingstock to a cash cow."
User Not-Reformed objects that having a cache is not the same as having a sustainable cash flow. At eBay's current capitalization, GameStop won't be able to buy the company without "astronomical help" from outside investors or severe dilution of shareholder stakes, he believes.
Chances of success
The current market value of GameStop is about $11 billion, eBay - $49 billion (given the dynamics of their securities on Monday, Ma 4). User Feortiz49 writes that the company is short of about $15 billion for the purchase. The idea to buy eBay, having gotten into debt through LBO (Leveraged Buyout) looks beautiful, but in reality GameStop simply does not have enough money, and the hole of tens of billions of dollars to close without a huge debt, dilution of shares or the arrival of outside investors is almost impossible, says Feortiz49.
GameStop trying to buy eBay is like having $9 in an account and trying to order an Uber for $42 because "the driver will pay for everything later". If anyone has a scheme to close a $15 billion hole without destroying shareholders or losing control, I'm listening.
User Warm-Rock-4544 also thinks the financial logic of the deal is questionable: the debt required to buy eBay might be too heavy for the combined company, and GameStop itself doesn't give eBay an obvious advantage in terms of financing.
Companies are not houses. The interest on the debt that would be required for such a deal would exceed the operating profits of the combined company and make it unviable. Plus, GameStop doesn't give eBay any advantage in terms of financing. Even if one were to hypothetically imagine a deal happening, it would essentially look like eBay buying itself and then being left owing itself. There is literally no reason for eBay to go through with this unless they want to destroy the company.
GameStop is offering to pay half in cash and half in GameStop stock. And here is the main risk: to finance it, the company will either have to take on a lot of debt or issue new shares. The second option looks the most likely - and that would mean severely diluting the stakes of existing GameStop shareholders, writes DM Martins Research equity research analyst Bernard Zambonin. In his opinion, the strong point in this story is Ryan Cohen himself: he has already proven that he knows how to cut costs and optimize his business. If he really manages to cut eBay's costs (he talks about $2 billion a year), it could dramatically increase profits and make the deal a success.
In an optimistic scenario, GameStop buys eBay, cuts costs, merges the offline network with the online marketplace, and creates a strong new platform. But it's unlikely to be an easy win, Zambonin believes.
Since the beginning of the year, eBay shares are up 26%, while GameStop securities have added about 22%.
This article was AI-translated and verified by a human editor
