GameStop Shares Decline as CEO Ryan Cohen Weighs Dropping $56 Billion eBay Bid for Partnership

NEW YORK — Shares of GameStop Corp. fell 1.86% to $18.47 in morning trading on Wednesday as investors digested reports that Chief Executive Ryan Cohen is considering withdrawing the company's $56 billion takeover proposal for eBay Inc. in favor of a partnership or joint venture.

The stock traded lower after opening near recent levels, reflecting continued caution following a sharp drop earlier this month tied to a major debt-for-equity swap and ongoing uncertainty around the retailer's ambitious acquisition strategy. GameStop, the specialty retailer of video games, collectibles and electronics, has seen its shares decline roughly 28% since it first floated the eBay bid in May.

According to people familiar with the matter reported by Bloomberg, Cohen is exploring an alternative structure that would let eBay use GameStop's roughly 1,600 U.S. retail locations to expand its physical presence in high-margin categories such as trading cards and collectibles. GameStop, already one of eBay's largest shareholders with a stake that has grown to about 9.75%, would seek board representation as part of any such arrangement. No final decision has been made, and other options remain under consideration.

The original non-binding proposal, valued at $125 per share in a mix of cash and GameStop stock, was rejected by eBay's board, which described the offer as "neither credible nor attractive." GameStop has continued to build its position in eBay through share purchases and options, making it the second-largest holder behind Vanguard Group funds.

The potential shift comes after GameStop announced on August 3 that it had agreed to privately exchange approximately $1.4 billion aggregate principal amount of its outstanding 0.00% convertible senior notes due 2030 and 2032 for shares of its Class A common stock. The exchange, expected to close around September 23 subject to customary conditions, retires the debt without using cash and is expected to leave roughly $1.1 billion of the 2030 notes and $1.7 billion of the 2032 notes outstanding. Shares fell more than 12% on the day of the announcement amid dilution concerns and volume that exceeded 41 million shares.

GameStop has reported improving operational results even as the eBay pursuit has dominated headlines. In its first quarter of fiscal 2026, ended May 2, the company posted net sales of $835.3 million, up 14% from $732.4 million a year earlier. Collectibles revenue jumped 65% to $348.9 million and accounted for nearly 42% of total sales, offsetting declines in software and hardware. Net income reached a company-record $389.6 million, compared with $44.8 million in the year-ago period, aided by operating improvements, lower selling, general and administrative expenses, and significant non-operating gains including unrealized gains on eBay-related options and interest income. Adjusted net income was $179.3 million.

Management has guided for adjusted EBITDA in excess of $600 million for the full fiscal year, nearly double the $345.4 million reported in fiscal 2025. The board also authorized a new $2 billion share repurchase program running through June 2029. GameStop ended the quarter with a substantial liquidity position that included billions in cash, marketable securities and related assets.

At its July annual meeting, stockholders approved an amendment increasing the number of authorized Class A common shares to 2.5 billion, providing additional flexibility for potential transactions or equity issuances. The company has also expanded its delivery options through a partnership with Uber Eats, allowing customers to receive video games, collectibles and electronics on demand.

Cohen, who has steered GameStop through aggressive cost-cutting and a pivot toward higher-margin collectibles since taking a larger leadership role, withdrew a proposed long-term performance award earlier this summer. The package, which could have been worth more than $35 billion upon hitting ambitious market-capitalization and profitability targets, was removed at his request so leadership could focus fully on operating performance and the eBay initiative. GameStop said at the time that Cohen wanted attention centered on those priorities.

The retailer continues to operate a reduced but still substantial store base that management views as a core logistics and fulfillment asset rather than a pure retail liability. International operations have been streamlined, including the earlier exit from Canada, while domestic stores remain central to the strategy.

Market reaction has been mixed. Some investors point to the improved profitability, cash position and collectibles momentum as evidence of a more sustainable business. Others remain focused on valuation, the potential dilution from the note exchange, and the gap between GameStop's market capitalization of roughly $8.4 billion and the scale of the eBay proposal. Shares have traded in a 52-week range of approximately $18.55 to $28.10.

GameStop's next scheduled earnings report is expected in early September for the second quarter. Until then, attention is likely to remain on any further clarity regarding the eBay relationship and the impact of the convertible-note exchange once the share-issuance details are finalized based on a volume-weighted average price reference period that began in early August.

The company has not issued an immediate public comment on the latest partnership discussions. As of the latest available filings and statements, GameStop maintains that its priority remains strengthening its core operations while evaluating strategic opportunities that could leverage its retail footprint and customer base in the growing collectibles and entertainment categories.