Investing.com -- GameStop Corp (NYSE:GME) shares jumped more than 4% in Friday’s after-hours session following reports that the retailer is preparing a formal offer for e-commerce giant eBay Inc (NASDAQ:EBAY). The news also sent eBay stock climbing over 12% as investors processed a deal that would unite the brick-and-mortar retailer with the world’s largest online secondary marketplace.
According to The Wall Street Journal, CEO Ryan Cohen is eyeing the deal as part of a strategic pivot to transform GameStop into a $100 billion-plus retail juggernaut. People familiar with the matter indicated that the company has been quietly building a stake in eBay shares ahead of the potential offer.
The proposed tie-up would likely focus on GameStop’s recent shift toward high-end collectibles and gaming memorabilia. This strategy aligns with eBay’s existing platform, which remains a primary global hub for secondary-market collectibles and rare goods.
GameStop, currently valued at approximately $12 billion, is pursuing a target several times its own size. eBay maintains a market capitalization of roughly $46 billion, though GameStop has fortified its balance sheet with nearly $9 billion in cash reserves as of March.
An official offer could be submitted to the eBay board as early as later this month. If leadership at the e-commerce firm proves unreceptive, Cohen may choose to take the bid directly to eBay’s shareholders.
This news comes as Cohen’s compensation package was recently adjusted to provide massive incentives for such a transformation. He stands to earn as much as $35 billion in stock if the company’s market value hits the $100 billion milestone, according to previous reports.
The CEO previously told The Wall Street Journal in late January that he was actively scoping out potential deal targets. He specifically emphasized expansion within the consumer and retail sectors to move the brand far beyond its core video game business.
Market participants are now closely watching for a formal response from eBay’s board of directors. Cohen is expected to leverage his significant online following to rally support for the deal should a proxy battle materialize.
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