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Gamestop continues to target eBay and has amassed a near 10% stake in the business. (Photo by Justin Sullivan/Getty Images)

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Ryan Cohen has never been afraid of taking on larger rivals. He transformed Chewy into one of America’s biggest online pet retailers, became the architect of GameStop's unlikely revival after the meme-stock frenzy, and has consistently argued that retailers need to reinvent themselves rather than simply chasing scale.

And now he has embarked on what may prove to be the most audacious takeover attempt in recent retail history.

GameStop has nearly doubled its stake in eBay to 9.8%, escalating pressure on the online marketplace after its unsolicited takeover proposal was rebuffed earlier this year, suggesting Cohen appears prepared for a prolonged battle.

According to a regulatory filing with the U.S. Securities and Exchange Commission, GameStop now owns 43.4 million eBay shares after significantly increasing its position over recent weeks. The retailer purchased 3.5 million shares before converting options covering a further 39 million shares into common stock, using cash generated from its substantial balance sheet.

The latest purchases come just weeks after GameStop disclosed a 5% economic interest in eBay alongside an unsolicited cash-and-stock proposal valuing the marketplace at approximately $57 billion.

In response, eBay's board wasted little time in dismissing the proposal. Directors described the offer as "neither credible nor attractive”, questioning both the financing package and the strategic rationale behind combining one of the world's largest online marketplaces with a specialist video game retailer whose own turnaround remains incomplete.

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Cohen Looks Set To Push ForwardHowever, Cohen appears determined to force the issue and the GameStop chief executive has expanded his advisory team and begun discussions with some of eBay's largest institutional shareholders as he explores taking his case directly to investors in a strategy that bears the hallmarks of activist investing.

By building close to the 10% ownership threshold, GameStop has positioned itself as one of eBay's largest shareholders, giving Cohen considerably greater influence over future corporate developments even if a full acquisition never materialises.

Under his proposal, shareholders would receive an equal combination of cash and newly issued GameStop shares, while Cohen has pledged roughly $500 million of his own capital and would become chief executive of the merged company.

But funding remains the proposal's biggest obstacle. GameStop has outlined a non-binding financing commitment worth around $20 billion from TD Securities, but the facility depends upon the combined business achieving investment-grade credit status following completion.

That caveat has provoked investor scepticism because GameStop’s own market capitalization remains only around one-fifth of eBay’s, creating a large mismatch between buyer and target. Even after raising billions through equity offerings during and after the meme-stock phenomenon, questions remain over whether GameStop possesses the financial firepower or operational capability to absorb a business several times its own size.

GameStop CEO Ryan Cohen promised to cut costs and focus on long-term profitability as he continues the company's turnover. (AP Photo/Charlie Neibergall, File)

Copyright 2021 The Associated Press. All rights reserved.

Several Wall Street banks have also questioned whether credit markets would support leverage on this scale, yet Cohen insists his vision centres on creating a broader digital commerce platform capable of competing more effectively against Amazon by combining eBay’s enormous global marketplace with GameStop’s brand recognition among younger consumers.

Strategy Pays Off For eBayLikewise, eBay has invested heavily in authenticated trading cards, luxury watches, handbags and sneakers under chief executive Jamie Iannone, attempting to move beyond its reputation as simply an online auction site. Those higher-value categories have delivered stronger margins and attracted younger consumers.

GameStop claims it could eliminate approximately $2 billion in annual costs within 12 months of completing a merger, though it has yet to provide detailed breakdowns explaining where those savings would originate.

GameStop still derives much of its revenue through its thousands of physical retail stores across the U.S. and Europe, while eBay generates revenue through marketplace fees with comparatively limited physical infrastructure. In addition, GameStop has embraced aggressive cost-cutting and entrepreneurial decision-making under Cohen, while eBay has focused on disciplined execution since Iannone took over in 2020.

Indeed, since Iannone became chief executive, eBay’s market value has almost tripled as investors rewarded improvements in profitability, shareholder returns and strategic focus.

That evolution arguably strengthens its case against GameStop. If shareholders already believe eBay possesses a successful long-term strategy, there is less incentive to support a highly leveraged takeover proposal from a significantly smaller company whose own transformation remains unfinished.

GameStop logo is seen in this illustration taken September 9, 2025. REUTERS/Dado Ruvic/Illustration Purchase Licensing Rights, opens new tab

CompaniesJuly 17 (Reuters) - Videogame retailer GameStop (GME.N), opens new tab owns nearly ​10% of e-commerce company eBay, ‌the company said in a regulatory filing late on Friday, ​nearly three months after ​making an unsolicited offer to ⁠buy eBay for roughly $56 ​billion.

GameStop said it owns 43.4 million outstanding ​shares of eBay (EBAY.O), opens new tab , or 9.8%, marking a dramatic increase in ownership from ​early May when GameStop ​CEO Ryan Cohen told eBay's board ‌chairman "we ⁠have accumulated a 5% economic stake" through derivatives and beneficial ownership.

Learn about the latest breakthroughs in AI and tech with the Reuters Artificial Intelligencer newsletter. Sign up here.

GameStop bought 3.5 ​million eBay ​shares ⁠for roughly $381 million last month and said ​it settled 39 million ​eBay ⁠shares from put/call pairs on Friday.

Reporting by Svea Herbsty-Bayliss ⁠in ​New York and ​Anhata Rooprai in Bengaluru; Editing by ​Jonathan Ananda and Chris Reese

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Gamestop CEO Ryan Cohen discusses the company's bid to acquire eBay, financing support for the plan, and how he sees the deal benefitting shareholders. Cohen tells Ed Ludlow, “eBay is a platform that I can build into something much more profitable and much larger.

SAN FRANCISCO--(BUSINESS WIRE)--Uber Technologies, Inc. (NYSE: UBER) and GameStop (NYSE: GME) today announced a new partnership that brings one of the largest gaming retailers to the Uber Eats marketplace. Customers can now order video games, gaming consoles, accessories, collectibles, and more from GameStop locations nationwide on Uber Eats for scheduled or on-demand delivery. GameStop is the latest retailer to join Uber Eats' rapidly growing marketplace, which now features thousands of storef.

GameStop's Q1 results showed real progress, with collectibles growth driving higher revenue, stronger margins, and a return to operating profitability. GameStop is increasingly using its balance sheet as a strategic tool through Bitcoin, eBay exposure, potential acquisitions, and buybacks. The proposed eBay acquisition could reshape the company, but it also brings meaningful execution, financing, and dilution risks.

GRAPEVINE, Texas--(BUSINESS WIRE)--GameStop Corp. (NYSE: GME) ("GameStop" or the "Company") today announced that its stockholders approved all proposals presented at the Company's 2026 Annual Meeting of Stockholders, including an amendment to the Company's certificate of incorporation increasing the number of authorized shares of Class A common stock. The amendment received the affirmative vote of 68.7% of votes cast, and provides the Company with the capacity to issue common stock in connectio.

There are plenty of things weighing on GameStop (GME +0.54%) these days. Annual revenue is now 61% lower than when it peaked 14 fiscal years ago, and that's without accounting for inflation. Despite its meme-stock appeal, the small-box retailer of video games and collectibles has seen its sales contract in each of the past four fiscal years.

It tried to shake things up with an unsolicited buyout offer for eBay (EBAY +2.48%) two months ago, but GameStop has been outbid by reality. This week, the chain got another worrying sign: Sony (SONY +2.30%) announced on Monday that it will cease physical game disc production for new games releasing on PlayStation consoles starting in 2028.

Image source: Getty Images.

Spin doctors Time hasn't been on GameStop's side for years, but now there's a date for the potential end. We're now 18 months away from when one of the three leading console makers goes solely digital in distributing new titles. Sure, you can buy access to digital codes through brick-and-mortar retailers. It's just become less necessary to do so in person. Console makers and software developers are cutting out the middleman.

The digital migration isn't new, and some consoles have been available without an optical disc drive since 2019. However, PlayStation gamers won't have the option to switch to spinning discs for new releases come 2028. This is bad for GameStop not just for the potential slide in store traffic as digital delivery becomes the industry standard. GameStop used to carve out a high-margin living selling refurbished discs and cartridges of popular games. Now it's leaning on collectibles to offset the slide in its resale business. That approach is working -- for now -- but collectibles don't offer the scalability and differentiated advantages that made GameStop's moat so effective a generation ago.

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No more going in circles? The news isn't all bad for GameStop. Profitability is growing despite four fiscal years of declining sales. Despite all the meme-stock hype, the video game stock is trading at a reasonable 21 times forward earnings. However, the surprising 14% jump in net sales was fueled entirely by a spike in interest for the store's trading cards, apparel, toys, and pop-culture merchandise. Back out the collectibles business, and net sales declined 7%. The business model isn't as sustainable as its former flywheel, but there are worse places to be in the retail space.

GameStop also has a cash-rich balance sheet. It wasn't enough to land eBay -- even if GameStop isn't throwing in the towel on the platform deal just yet -- but it will probably have to aim smaller if it eventually tries to grab something else. A company isn't going to take a stock-and-cash deal from a business whose shares have declined 4% over the past year and plummeted 56% over the past five years.

Sony's move is evolutionary, not revolutionary. Will other console makers follow, in today's climate of rising memory and data storage costs? GameStop isn't in the clear, but it has resources, if not cheat codes, to keep playing the game.

GRAPEVINE, Texas--(BUSINESS WIRE)--GameStop Corp. (NYSE: GME) (“GameStop” or the “Company”) today announced that, for the fiscal year ending January 30, 2027 ("fiscal year 2026"), the Company currently expects to generate Adjusted EBITDA in excess of $600 million, compared to Adjusted EBITDA of $345.4 million in fiscal year 2025.

GameStop's leadership team remains focused on advancing the proposed acquisition of eBay, Inc. ("eBay"). Additional materials regarding the proposed transaction are forthcoming.

A Current Report on Form 8-K furnishing the Company's fiscal year 2026 outlook has been filed with the Securities and Exchange Commission and is available at www.sec.gov and on the Company's investor relations website at investor.gamestop.com.

NON-GAAP MEASURES AND OTHER METRICS

As a supplement to the Company’s financial results presented in accordance with U.S. generally accepted accounting principles ("GAAP"), GameStop may use certain non-GAAP measures, including adjusted EBITDA. Adjusted EBITDA is a supplemental financial measure of the Company’s performance that is not required by, or presented in accordance with, GAAP. We believe that the presentation of this non-GAAP financial measure provides useful information to investors in assessing our core operating performance, financial condition and results of operations. We define adjusted EBITDA as net income before income taxes, plus interest income, net and depreciation and amortization, excluding stock-based compensation, certain transformation costs (including severance and other costs), business divestitures, asset impairments, gain (loss) on digital assets and related receivables, unrealized gain (loss) on derivative assets, and other non-cash charges. Net income is the GAAP financial measure most directly comparable to adjusted EBITDA. Our non-GAAP financial measures should not be considered as an alternative to the most directly comparable GAAP financial measure. Furthermore, non-GAAP financial measures have limitations as an analytical tool because they exclude some but not all items that affect the most directly comparable GAAP financial measures. Some of these limitations include:

certain items excluded from adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, results of operations or cash flows; adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for such replacements; and our computations of adjusted EBITDA may not be comparable to other similarly titled measures of other companies. We compensate for the limitations of adjusted EBITDA as analytical tools by reviewing the comparable GAAP financial measure, understanding the differences between the GAAP and non-GAAP financial measures and incorporating these data points into our decision-making process. Adjusted EBITDA is provided in addition to, and not as an alternative to, the Company’s financial results prepared in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because adjusted EBITDA may be defined and determined differently by other companies in our industry, our definitions of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

With regards to forward-looking guidance for adjusted EBITDA, we are not able to reconcile the forward-looking non-GAAP measure of adjusted EBITDA to the closest corresponding GAAP measure, net income, without unreasonable efforts because we are unable to predict the ultimate outcome of certain significant items.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS - SAFE HARBOR

This Press Release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by the use of terms such as "anticipates," "believes," "continues," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "pro forma," "seeks," "should," "will" or similar expressions. Forward-looking statements are subject to significant risks and uncertainties and actual developments, business decisions, outcomes and results may differ materially from those reflected or described in the forward-looking statements. The following factors, among others, could cause actual developments, business decisions, outcomes and results to differ materially from those reflected or described in the forward-looking statements: the performance of our business and our ability to generate earnings in line with our guidance; economic, social, and political conditions in the markets in which we operate; the competitive nature of the Company’s industry; the cyclicality of the video game industry; the Company’s dependence on the timely delivery of new and innovative products from its vendors; the impact of technological advances in the video game industry and related changes in consumer behavior on the Company’s sales; interruptions to the Company’s supply chain or the supply chain of our suppliers; the Company’s dependence on sales during the holiday selling season and on the popularity and sale of trading cards; the Company’s ability to obtain favorable terms from its current and future suppliers and service providers; the Company’s ability to anticipate, identify and react to trends in pop culture with regard to its sales of collectibles; the Company’s ability to maintain strong retail and ecommerce experiences for its customers; the Company’s ability to keep pace with changing industry technology and consumer preferences; how the Company incorporates artificial intelligence into workflows and processes, including customer-facing and operational activities, and challenges with properly managing its use; the Company’s ability to manage its profitability and cost reduction initiatives; the Company’s ability to complete its proposed acquisition of eBay Inc.; changes in senior management or the Company’s ability to attract and retain qualified personnel; the Company is highly dependent on the services of the Company’s Chairman of the Board and Chief Executive Officer, Ryan Cohen; if the grant of a 100% performance-based nonqualified stock option award (the “CEO Performance Award”) to Mr. Cohen is not approved by the Company’s stockholders or if the Company is unable to adequately incentivize Mr. Cohen to maintain his focus and priorities on the Company, the Company's ability to execute on its strategy and achieve its growth goals may be adversely impacted; the CEO Performance Award, if and to the extent the stock options associated become vested and are exercised, would result in dilution to the Company’s stockholders and could impact the Company’s stock price; potential damage to the Company’s reputation or customers' perception of the Company; the Company's ability, or the ability of the third parties with whom we work, to maintain the security of our information technology systems or data (including customer, associate or Company information); the Company's compliance with stringent and evolving laws and other obligations related to data privacy and security; occurrence of weather events, natural disasters, public health crises and other unexpected events; risks associated with inventory shrinkage; potential failure or inadequacy of the Company's computerized systems; the ability of the Company’s third party delivery services to deliver products to the Company’s retail locations, fulfillment centers and consumers and changes in the terms the Company has with such service providers; the ability and willingness of the Company’s vendors to provide marketing and merchandising support at historical or anticipated levels; restrictions on the Company’s ability to purchase and sell pre-owned products; the Company’s ability to renew or enter into new leases on favorable terms; unfavorable changes in the Company’s global tax rate; legislative actions; the Company’s ability to comply with federal, state, local and international laws and regulations and statutes; changes to tariff and import/export regulations; potential litigation and other legal proceedings; the value of the Company's investment holdings; concentration of the Company's investment portfolio into one or fewer holdings; the recognition of losses in a particular investment even if the Company has not sold the investment; the execution and timing of share repurchases, if any, under the share repurchase authorization; volatility in the Company’s stock price, including volatility due to potential short squeezes; continued high degrees of media coverage by third parties; the availability and future sales of substantial amounts of the Company’s Class A common stock; the issuance of common stock upon the exercise of the warrants declared as part of the October 7, 2025 distribution to the holders of record of the Company's Class A common stock and holders of the Convertible Notes, in the form of warrants to purchase shares of common stock (the “Warrants”), may depress our stock price; future issuance of additional warrants may adversely affect the market price of the Warrants and the market price of the Company’s common stock; the Warrants do not automatically exercise, and any Warrant that is not exercised prior to their expiration date will lose all financial value; fluctuations in the Company’s results of operations from quarter to quarter; the Company’s ability to generate sufficient cash flow to fund its operations; the $1.5 billion 0.00% Convertible Senior Notes due 2030 (the “Convertible 2030 Notes") and $2,250.0 million 0.00% Convertible Senior Notes due 2032 (the "Convertible 2032 Notes" and, collectively with the Convertible 2030 Notes, the "Convertible Notes") are the Company’s obligations only, and substantially all of our operations are conducted through, and a portion of our consolidated assets are held by, our subsidiaries; servicing the Convertible Notes requires a significant amount of cash, and the Company may not have sufficient cash flow from our business to make such payments, and we may incur additional indebtedness in the future; the Company’s ability to incur additional debt; risks associated with the Company’s investment in marketable, nonmarketable and interest-bearing securities, including the impact of such investments on Company’s financial results; the Company's investment policy permits investments in certain cryptocurrency assets, including Bitcoin and U.S. dollar-denominated stable coins, and to the extent the Company holds Bitcoin or U.S. dollar denominated stable coins, the Company will be exposed to certain risks associated with Bitcoin or stable coins, respectively; the Company’s derivative strategy can expose it to counterparty risk; and the Company’s ability to maintain effective internal control over financial reporting. Additional factors that could cause results to differ materially from those reflected or described in the forward-looking statements can be found in GameStop's most recent Annual Report on Form 10-K and other filings made from time to time with the Securities and Exchange Commission and available at www.sec.gov or on the Company’s investor relations website (https://investor.gamestop.com). Forward-looking statements contained in this Press Release speak only as of the date of this Press Release. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

Preliminary Financial Information

We report our financial results in accordance with U.S. generally accepted accounting principles. All projected financial information in this Press Release is preliminary. These estimates are not a comprehensive statement of our financial position and results of operations. There is no assurance that the Company will achieve its forecasted results within the relevant period or otherwise. Actual results may differ materially from these estimates as a result of actual quarter-end results, the completion of normal quarter-end accounting procedures and adjustments, including the execution of our internal control over financial reporting, the completion of the preparation and management’s review of our financial statements for the relevant period and the subsequent occurrence or identification of events prior to the filing of our financial results for the relevant period with the Securities and Exchange Commission.

No Offer or Solicitation

This communication relates to a business combination involving GameStop and eBay that has been proposed by GameStop (the “Proposed Transaction”). This communication is for informational purposes only and is neither an offer to sell or purchase, nor the solicitation of an offer to buy or sell, any securities (or the solicitation of any proxy or vote with respect to any matter), nor shall there be any sale or purchase, issuance or other transfer of securities (or the solicitation of any proxy or other vote) with respect to the Proposed Transaction or otherwise in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

Certain Information Regarding Participants

GameStop and its directors and certain of its executive officers may be considered participants in the solicitation of proxies in connection with the Proposed Transaction, should the Proposed Transaction and any such solicitation occur. Information about the directors and executive officers of GameStop is set forth in GameStop’s definitive proxy statement for the 2026 Annual Meeting of Stockholders to be held July 7, 2026 at 10:00 a.m. CDT, which was filed with the SEC on May 22, 2026 (as supplemented from time to time, the “2026 Proxy Statement”), which is available here, including under the headings “Proposal 1: Election of Directors”, “Director Nomination Process”, “The Director Nominees”, “Director Nominee Qualifications and Experience”, “Biographies of Director Nominees”, “The Board of Directors”, “Corporate Governance”, “Director Compensation”, “Executive Officers”, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters”, “Compensation Committee Interlocks and Insider Participation”, “Proposal No. 2: Advisory Vote on Executive Compensation”, “Compensation Discussion and Analysis”, “Offer Letters and Severance/Change in Control Benefits”, “Compensation Committee Report on Executive Compensation”, “Executive Compensation Tables”, “CEO Pay Ratio”, “Pay Versus Performance”, “Equity Grant Practices”, “Securities Authorized for Issuance Under Equity Compensation Plans”, “Audit Committee Matters”, “Certain Relationships and Related Transactions”, “Proposal 4: Approval of CEO Performance Award”, “Summary of the Proposed CEO Performance Award”, “Reasons for Approval of the CEO Performance Award”, “Market Capitalization Hurdles with Cumulative Performance EBITDA Hurdles Create Real Value for Stockholders”, “Background of the CEO Performance Award”, “Key Terms of the Proposed CEO Performance Award”, “Other Details Regarding the Proposed CEO Performance Award”, “The Compensation Committee’s Assessment of the CEO Performance Award”, “Practical Implications of the CEO Performance Award” and “Appendix A: CEO Performance Award Agreement”. To the extent holdings of such persons in the Company’s securities have changed since the amounts described in the 2026 Proxy Statement, such changes have been reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC. Additional information can also be found in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026, filed with the SEC on March 24, 2026, which is available here.

As of the date hereof, GameStop directly beneficially owns 4,343,725 shares of common stock of eBay, par value $0.001 per share (the “Common Stock”), and has further entered into the long-side of a series of American-style put/call option transactions (the “Put/Call Pairs”), expiring February 23, 2028, with an unaffiliated financial institution counterparty that provide economic exposure to a further 39,046,658 shares of Common Stock. The Put/Call Pairs were only settleable in cash until such time as GameStop provided the unaffiliated financial institution counterparty with reasonable evidence that all applicable filings had been made and any applicable waiting periods had expired or approvals had been received, as applicable, under the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act Condition”). On June 3, 2026, the HSR Act Condition was satisfied, and as a result, GameStop (in the case of the call portion of the Put/Call Pairs) and the unaffiliated financial institution counterparty (in the case of the put portion of the Put/Call Pairs) electing to settle the Put/Call Pairs now have the option, but not the obligation, to elect for physical settlement of the shares of Common Stock underlying such Put/Call Pairs in lieu of cash settlement. GameStop does not have voting power or dispositive power with respect to the shares of Common Stock underlying such Put/Call Pairs unless and until such Put/Call Pairs are physically settled for Common Stock. On May 3, 2026, GameStop delivered to the board of directors of eBay a non-binding proposal to acquire all of the outstanding Common Stock that it does not already own at a price of $125 per share of Common Stock, to be paid in a combination of cash and GameStop common stock. As a result of the foregoing, GameStop may be deemed to have direct or indirect interests with respect to eBay that are in addition to, or different from, those of other eBay shareholders.

Further information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in any proxy statement/prospectus and/or other relevant materials to be filed with the SEC in connection with the Proposed Transaction when they become available.

Disclaimer

Any information concerning eBay contained in this communication has been taken from, or based upon, publicly available information. Although GameStop does not have any information that would indicate that any information contained in this communication that has been taken from such documents is inaccurate or incomplete, GameStop does not take any responsibility for the accuracy or completeness of such information. To date, GameStop has not had access to the books and records of eBay.

More News From GameStop Corp.

GameStop CEO Ryan Cohen reminded Wall Street this week that he's still serious about buying eBay. But he still didn't make clear how he can do it.

The video game retailer, which became the world's most famous meme stock in 2021, said Tuesday that its board granted a request from Cohen to withdraw a proposed bonus plan that could have paid him as much as $35 billion if he hit certain performance metrics.

It was the company's first major update regarding its pursuit of eBay since May, when Cohen unveiled his audacious bid to buy the e-commerce company for $56 billion. EBay's board rejected the proposal soon after, calling it "neither credible nor attractive," a sentiment that was shared by the broader market given GameStop's market cap of roughly $10 billion.

Cohen, who became GameStop's CEO in 2023 and steered the company to profitability through aggressive cost cuts, has done little to satisfy the skeptics. GameStop said at the time of the proposal that it had lined up a $20 billion financing letter from TD Bank, but didn't say how it would address the remaining funding gap.

In a combative interview with CNBC, Cohen said the company was offering half cash and half stock, with "the ability to issue stock in order to get the deal done." The shares sank 10% on the day of the announcement and have trended lower since.

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Now Cohen is returning to the matter by scrapping a bonus plan that was announced in January. One of the requirements to reach the full $35 billion payout was lifting GameStop's market cap to $100 billion.

"Mr. Cohen stated that he wants leadership fully focused on GameStop's operating performance and its proposed eBay acquisition," the company wrote in Tuesday's statement. GameStop said it would release a "detailed presentation" about the strategic rationale and operational plan behind its eBay offer this week. 

Eden Chen, a former scout for venture firm Andreessen Horowitz and CEO of gaming software company FirstLook, said that by nixing the bonus, Cohen is at least removing the concern that he wants to do the deal as a way to get his bonus.

"His pay package was tied to getting a certain market cap, and if he merged with a much larger company, conceivably that would get him there quickly," Chen said. GameStop wrote in its release Tuesday that the company hadn't decided to pursue the eBay deal when its board approved the pay package.

Still, Chen said, Cohen hasn't resolved the larger question of "How does a $10 billion company take over a $50 billion company?"

GameStop didn't respond to a request for comment.

Wall Street likes eBay's directionCohen certainly isn't getting any help from eBay. The company, founded in 1995, is in the midst of a turnaround centered on "focus categories" like trading cards, auto parts and collectibles.

Investors have largely applauded the plan, sending eBay's shares up about 25% this year after a 41% rally in 2025. Citizens analysts, who have a market outperform rating on eBay stock, said in a May note that the company is experiencing strong momentum and has "done a good job of focusing on winnable categories."

In its response to Cohen's May offer, eBay's board said that it was confident in the current management team and that the business has "delivered meaningful results" over the past several years. The board pointed to financing uncertainty, operational risks and leadership concerns as some of its objections to the deal.

"Cohen has yet to address these concerns in a meaningful way," said Sky Canaves, a principal analyst at eMarketer, in an email.

But that doesn't mean Cohen has been silent. Rather, he's continued to defend the proposal in public appearances and from his X account, triggering subsequent Securities and Exchange Commission filings from eBay.

"When you look at how much the businesses together make sense and then you look at the fact that it's within my circle of competence, I can't stop thinking about it," Cohen, who previously co-founded Chewy, said in an episode of the "All-In Podcast" released Tuesday. 

Cohen hinted in the interview that he's prepared to put $500 million of his own money into the offer, an addition that would cover only a small part of the funding gap.

Brian Quinn, a professor at Boston College Law School, said Cohen's offer is little more than a distraction for eBay.

"Unless GME showed up with a huge pile of cash, the GME offer was only a promise of a ride on the meme-coaster, and no serious board wants any part of that," Quinn said in an email. 

Even apart from the eBay acquisition effort, Cohen's bonus package had its share of critics.

Earlier this month, the City of Pontiac General Employees' Retirement System filed a proposed class-action lawsuit in Delaware that sought to halt a shareholder vote on Cohen's pay package until the board provided "proper disclosures" on the plan. It would have come up for a vote at GameStop's annual meeting scheduled for July 7.

GameStop said in a filing that the lawsuit is without merit, and that the company "intends to vigorously defend against it."

Paul Nary, an assistant professor of management at the University of Pennsylvania's Wharton School, said the pay package withdrawal suggests Cohen is serious about his pursuit of eBay, but "quite a few details need to be filled in" about how he'll make it happen.

"Mr. Cohen seems to be escalating his commitment to the eBay deal, and maybe his signal that he wants to do it even without the outrageous pay package is sincere," Nary said by email. "Yet whether this escalating commitment to buying eBay is a good thing for GME shareholders, I'm not quite sure yet."

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GameStop Corp (NYSE:GME)'s board has scrapped a proposed CEO performance award after a request from CEO Ryan Cohen, who said he wants leadership focused on the company's operating performance and its pursuit of online marketplace eBay.

The award, approved in January 2026, would have paid Cohen as much as $35 billion if GameStop reached a market capitalization of $100 billion.

Its removal comes as the video game retailer faces mounting investor backlash over its unsolicited $56 billion bid for eBay, a company roughly four times GameStop's size.

eBay's board has already rejected the offer as "neither credible nor attractive," citing concerns over financing and leadership.

GameStop said it plans to release additional details this week on the strategic rationale for the proposed acquisition, including how the two companies could fit together and what a combined business might look like. The company stressed the update does not constitute an offer or solicitation tied to the transaction.

Legal pressure is also building. The City of Pontiac General Employees' Retirement System has filed a proposed class-action lawsuit in Delaware, alleging the board manipulated voting rules to favor insiders ahead of a shareholder vote. A separate investor suit had sought to pause the bonus plan pending fuller shareholder disclosures.

GameStop has denied that the eBay bid was motivated by the performance award's $100 billion market cap threshold.

GME stock is moving. See the chart and price action here.  The decision, disclosed in an update to GameStop’s proxy materials, removes a CEO Performance Award that had been approved by the board earlier in 2026. 

At the time, the company had not yet decided to explore acquiring eBay. Cohen’s request to eliminate the package now aligns leadership incentives with what could become one of the most transformative deals in the company’s history.

Cohen framed the move as a way to keep management fully focused on execution. The emphasis is not on compensation, but on operational performance and the integration strategy tied to the proposed eBay transaction. 

GameStop leadership is prioritizing long-term value creation over near-term incentives.

Focused on eBay The potential acquisition of eBay marks a dramatic escalation in GameStop’s evolution from a legacy brick-and-mortar video game retailer into a broader e-commerce platform. 

EBay brings a global marketplace, established seller networks and logistics infrastructure that GameStop currently lacks.

At the same time, the move raises critical questions about execution risk and capital allocation. Integrating a large, complex platform like eBay would require significant operational discipline. It would also test GameStop’s ability to manage a business far larger and more diversified than its current footprint.

Cohen’s decision to step back from performance-based pay may also serve a governance purpose. 

By removing a potentially controversial compensation structure ahead of a major strategic shift, GameStop reduces a possible distraction for shareholders. The focus instead shifts squarely to the merits of the deal itself.

The TakeawayGameStop said it will release additional materials this week outlining the strategic rationale and operational plan for the combined company. The details are likely to be closely scrutinized, particularly around synergies, cost structure and long-term growth assumptions.

As it stands, the message from leadership is one of alignment and intent. Cohen is tying his leadership credibility directly to the success of the eBay strategy, rather than to a predefined incentive package. 

Markets will ultimately judge whether this bold approach delivers the transformation GameStop has been seeking.

GME Stock Price Activity: GameStop stock was up 0.83% at $21.13 at the time of publication Wednesday, according to data from Benzinga Pro.

Over the past month, GME has declined about 3.7% versus a 2.3% decline in the S&P 500 and is up roughly 4% year-to-date compared to the index’s 6.9% gain. The stock is trading near its 52-week low of $19.93.

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Ryan Cohen, the GameStop chairman and CEO whose Chewy exit made him a household name in retail-investor circles, sat down with Jason Calacanis on the All-In podcast and made clear that his unsolicited run at eBay is not a pose. “I’m going to do whatever we need to do, whatever I need to do in order to succeed,” he said when asked about going hostile or launching a tender offer. The message to eBay (NASDAQ:EBAY | EBAY Price Prediction) shareholders, and to the board that already told him no, is that he plans to keep showing up.

The board of eBay has treated the bid as something to be managed rather than negotiated. In May, directors rejected Cohen’s $55.5 billion offer at $125 per share as “neither credible nor attractive,” citing financing, operational risk, and governance concerns. Cohen’s response was to keep buying. GameStop (NYSE:GME) has built its position to roughly 7.8% of eBay, and its Q1 FY2026 filing now lists the “proposed acquisition of eBay Inc.” as a formal risk factor, complete with derivative positions providing economic exposure.

Cohen’s argument in his own words The strategic case Cohen made to Calacanis was a scope argument, not a cost-cutting one. “It makes sense for me to pay this for the business because of what I could do with the business. Not just short-term in terms of increasing the earnings, but long-term in terms of really taking significant market share in live commerce,” he said, framing the deal as a path to “a digital marketplace for gaming.” Existing eBay management, in his telling, could “never” build that “in their wildest dreams.”

Then comes the antitrust wrinkle. Cohen argued that eBay’s natural strategic acquirers, Amazon and other platform giants, are boxed out by regulators, so a competing bid is unlikely. Without rival bidders, eBay’s bankers end up negotiating against themselves, and if active holders sell into the open market to event-driven funds, the board faces a different shareholder base than the one that backed the rejection. Cohen said he is working with “high-priced advisors” and has “a lot of different escalation paths.”

What the numbers support The arithmetic of the bid is what skeptics keep returning to. GameStop carries a market cap near $9.64 billion and is trying to swallow a company worth roughly $49.4 billion. eBay closed out FY2025 with $11.1 billion in revenue, $1.996 billion in net income, and a $1.2 billion all-cash deal for Depop already in the pipeline, details visible in the company’s Q4 8-K filing. eBay shares have risen 28% year to date and ~50% over the past year, which complicates any premium argument. The stock currently trades at $111, narrowing the gap to Cohen’s $125 offer and shrinking the headline premium.

Financing is the other open question. GameStop has roughly $7.40 billion in cash and securities and points to a $20 billion financing commitment from TD Securities, though that arrives in the form of a “highly confident letter” rather than hard capital. Michael Burry exited his GameStop position after the bid, telling anyone who would listen that “the debt is the problem.” Steve Eisman lined up alongside him.

What the market is pricing Prediction markets have settled into a clear stance. Polymarket bettors put the odds of GameStop acquiring eBay by year-end 2026 at 14%, with an 86% implied probability that the deal fails. The market is competitive and well-trafficked, which makes the skepticism harder to dismiss as thin liquidity.

GameStop itself is the wildcard. Q1 FY2026 revenue grew 14% to $835.3 million, gross margin expanded to 40.7% from 34.5%, and the collectibles category jumped 65% year over year. Shares are roughly flat year to date, which suggests holders are not penalizing Cohen for the eBay distraction, but they are not rewarding him either.

Cohen has built the cash, the stake, and the rhetoric. Whether eBay’s board ever has to actually negotiate depends on whether shareholders make them.

Investors often weigh established retail names against digital marketplace leaders when seeking growth. Choosing between GameStop (GME 0.17%) and StubHub (STUB +3.77%) requires a deep dive into their shifting business models and 2026 valuations.

GameStop continues to pivot its legacy physical gaming business toward a leaner model despite declining top-line sales. StubHub remains a dominant force in live event ticketing, though it faces unique regulatory challenges and significant net losses. This article explores how their respective strategies and financial health compare for investors looking at the current market.

The case for GameStopGameStop sells games, collectibles, and entertainment products through thousands of stores and digital platforms. Within the landscape of retail stocks, the company relies heavily on relationships with major gaming vendors like Sony and Nintendo. These key partners accounted for a majority of new product purchases in fiscal 2025, which means high customer concentration adds a layer of risk to the business.

In its 2025 fiscal year (FY), revenue reached $3.6 billion, representing a decline of 5.1% compared to the prior year. Despite lower sales, the company reported a net income of $418.4 million, which was a notable increase from the $131.3 million earned in fiscal 2024. The 11.5% net margin, which measures how much profit is kept from every dollar of sales, reflects this year-over-year improvement.

As of its January 2026 balance sheet, the debt-to-equity ratio was 0.8x. This ratio measures total debt against shareholder equity, with a lower number typically suggesting a less risky financial structure. The current ratio stands at 15.3x, explaining the company’s strong ability to cover its short-term liabilities with current assets. During FY 2025, the company generated free cash flow of $597.3 million.

The case for StubHubStubHub operates a global marketplace that connects fans with sellers of tickets for live sports, music, and theater events. The company manages two major brands, serving customers in over 200 countries and supporting dozens of languages. To expand its reach, the company recently entered an open distribution partnership with ULTRA Europe to increase its inventory of international events.

During FY 2025, revenue was $1.7 billion, which was a slight decrease of 1.4% from the previous year. The company reported a net loss of $1.9 billion for the fiscal year, a significant shift from the net income generated in 2023. The net margin for the period was negative 109.2%, indicating that total expenses significantly exceeded revenue.

According to the December 2025 balance sheet, StubHub maintains a debt-to-equity ratio of 0.8x. This level of leverage indicates the company uses a moderate amount of debt to fund its operations relative to its equity. The current ratio is 1.0x, meaning the company has just enough short-term assets to cover its upcoming bills. Despite the reported net loss, the company generated free cash flow of $191.2 million in FY 2025.

Risk profile comparisonGameStop faces significant pressure from the shift toward digital game downloads, which threatens its physical software market. The company is also highly dependent on CEO Ryan Cohen, and a 2026 shareholder lawsuit regarding his performance award has created some leadership uncertainty. Furthermore, the company holds volatile assets like Bitcoin (BTC +0.65%), which exposes it to market swings and accounting risks. Competition remains fierce from mass-market giants like Walmart.

StubHub must navigate a complex regulatory environment, highlighted by a $10 million settlement with the FTC over hidden fees in April 2026. Its business is also entirely dependent on the health of the live events industry, which can be disrupted by economic downturns or tour cancellations. The company faces intense competition from primary ticket sellers and other secondary platforms. Additionally, as a digital-first company, it relies on third-party cloud infrastructure, making it vulnerable to system interruptions.

Valuation comparisonGameStop trades at a lower Forward P/E than StubHub, while StubHub features a lower P/S ratio relative to its peer.

MetricGameStopStubHubSector BenchmarkForward P/E19.7x25.7x28.6xP/S ratio2.7x2.3xn/aSector benchmark uses the SPDR XLY sector ETF. Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Both GameStop and StubHub are at key inflection points in their histories. GameStop’s core retail business is in decline, and it is trying to find a path forward under CEO Ryan Cohen. StubHub went public in September of 2025 at $23.50 per share, and now must prove its stock price can rebound as shares remain well below the IPO price.

GameStop is doing well from a financial perspective. It had the highest quarterly net income in its history, reporting $389.6 million in its fiscal first quarter ended May 2. The company is building a business around collectibles, and as a result, Cohen sees synergies with e-commerce giant eBay.

That’s why GameStop tried to buy eBay. Although its offer was rejected by eBay’s Board of Directors, GameStop may pursue a hostile takeover attempt.

StubHub’s 2025 performance wasn’t ideal, but it’s off to a strong start in 2026. In Q1, revenue rose 12% year over year to $446.0 million. In addition, the company made a dramatic reversal from a net loss of $22.2 million in 2025 to net income of $48.0 million this year.

Although GameStop’s financials are looking good, I would buy StubHub stock over the retailer. GameStop is still finding a path to long-term revenue growth. I’m not convinced its focus on collectibles and attempts to buy eBay will make it a good investment over the long haul. Meanwhile, StubHub’s Q1 results demonstrate its business has the potential to deliver solid gains in time.

GameStop logo is seen in this illustration taken September 9, 2025. REUTERS/Dado Ruvic/Illustration Purchase Licensing Rights, opens new tab

CompaniesJune 23 (Reuters) - Ryan Cohen, the billionaire CEO of GameStop (GME.N), opens new tab, will not receive ​a potential performance award from the videogame retailer and plans to unveil ‌more details about his bid to take over eBay soon, the company said on Tuesday.

GameStop unveiled a compensation package worth roughly $35 billion for Cohen in January, hinging on a turnaround that requires him ​to lift the struggling company's market value more than tenfold and sharply ​boost its profit.

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In May, Cohen surprised Wall Street with an unsolicited ⁠offer to buy eBay for roughly $56 billion in cash and stock to turn ​the e-commerce company into a bigger competitor to Amazon.

EBay's board rejected the proposal, calling the ​offer "neither credible nor attractive."

Cohen argued that he doesn't want the package so that GameStop's leadership can fully focus on its operating performance and the planned acquisition.

GameStop's short statement said it would release ​additional materials regarding its plans for eBay this week, including a detailed presentation of ​the strategic rationale and operational plan for the combined company. On Tuesday an eBay spokesman had ‌no ⁠comment on GameStop's statement.

Speculation about how Cohen, who joined the GameStop board in January 2021 and became the CEO in September 2023, might move forward on trying to buy eBay has grown on Wall Street in recent weeks.

Cohen successfully steered GameStop's return to profitability through ​aggressive cost cutting, ​which included shuttering ⁠hundreds of stores.

Earlier this month, GameStop posted a 14% rise in quarterly revenue, buoyed by strong collectibles demand, and said its ​board approved a new $2 billion share repurchase program.

Still, GameStop, which has ​a market ⁠value of nearly $10 billion, is trying to buy a company roughly five times its size, puzzling investors and analysts about where the money might come from, bankers and ⁠lawyers have ​said.

For the first quarter ended May 2, GameStop's ​net sales came in at $835.3 million, compared with $732.4 million a year ago.

Reporting by Jaspreet Singh in Bengaluru and ​Svea Herbst-Bayliss in New York; Editing by Anil D'Silva, Sahal Muhammed and Deepa Babington

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Jaspreet Singh joined Reuters as a technology reporter in April 2023. He covers a raft of developments including deals, layoffs, management changes, quarterly earnings and the latest in the world of AI. He is interested in stories that bring to light any corporate misconduct, abuse of power and innovation. Jaspreet graduated from Panjab University with a degree in Journalism. If you have any sensitive information or a tip to share, contact him for an off-the-record introduction chat. He will explain what it means to speak with a reporter on background.

Citron Research founder Andrew Left was convicted of securities fraud after a jury found he misled investors on trades.

GameStop on ​Tuesday reported ‌a 14% ​rise ​in quarterly revenue ⁠and ​said its ​board has approved a ​new $2 ​billion share repurchase ‌program.

The videogame retailer reported a first-quarter profit of $389.6 million, up from $44.8 million a year earlier.

GameStop Corporation (NYSE:GME) shares are trading higher Wednesday after the company announced better-than-expected first-quarter financial results on Tuesday after the market closed. The company also approved a $2 billion repurchase authorization.

GameStop GME shares rose on Wednesday after the video game retailer reported record quarterly earnings and unveiled a new $2 billion share repurchase program, even as its recent bid to acquire eBay failed to gain traction.

The company's stock climbed 6.12% to $22.21on Wednesday after it posted what it described as the highest quarterly net income in its history and the strongest first-quarter operating profit on record.

GameStop reported first-quarter net income of $389.6 million, or 66 cents per share, compared with $44.8 million, or 9 cents per share, during the same period a year earlier.

Revenue increased 14% year over year to $835.3 million from $732.4 million, with the company attributing the growth primarily to strength in its collectibles business.

Adjusted net income, which excludes impairments, gains on digital assets and related receivables, unrealized gains on derivative assets, and certain other items, rose to $179.3 million from $73 million a year ago.

On an adjusted basis, the company earned 30 cents per share.

The latest results suggest GameStop's ongoing efforts to diversify beyond traditional video game retailing are gaining momentum.

The company said year-over-year sales growth was largely driven by its collectibles segment, an area it has increasingly emphasized as physical game sales across the industry have come under pressure.

Operating income reached $143.3 million, marking the company's strongest first-quarter operating performance on record.

The earnings report comes despite limited Wall Street coverage of the company.

Alongside the earnings release, GameStop announced that its board of directors had approved a new $2 billion stock repurchase authorization.

The program will remain in effect through June 2, 2029, replacing a previous authorization established in March 2019.

Share buyback programs typically reduce the number of shares outstanding and can provide additional support for earnings per share over time.

The announcement added to positive investor sentiment following the stronger-than-expected profitability and revenue growth reported for the quarter.

eBay takeover bid remains in focusThe earnings release follows GameStop's recent attempt to acquire eBay in a transaction valued at approximately $56 billion in cash and stock.

Late last month, eBay said its board and independent advisers had reviewed the proposal and decided to reject it, citing uncertainty surrounding financing, leverage, and the leadership structure of a combined company.

Despite the rejection, GameStop subsequently disclosed that it had increased its ownership stake in eBay to 6.55% of the company's outstanding shares, up from roughly 5%.

The retailer has also recently asked shareholders to approve an increase in its authorized share count as well as a 100% performance-based option award for Chief Executive Officer Ryan Cohen.

While the proposed acquisition did not move forward, GameStop's latest results and substantial buyback authorization shifted investor attention back toward the company's improving financial performance and evolving capital allocation strategy.

Retail investors talked up five hot stocks this week (June 1 to June 5) on X and Reddit’s r/WallStreetBets, driven by retail hype, earnings, AI infrastructure momentum, and corporate/geopolitical news flow.

Retail investors were bullish on MRVL. An investor who suffered losses on his portfolio this week was considering shifting all his holdings to MRVL, calling it a “steady” stock. The stock had a 52-week range of $61.44 to $324.20, trading around $305 to $317 per share, as of the publication of this article. It was up 377.27% over the year, higher by 222.26% over the last six months, and 272.36% year-to-date. MRVL had a strong price trend in the medium, short, and long term, with a solid growth ranking, as per Benzinga's Edge Stock Rankings. Broadcom Some retail investors were frustrated at how AVGO earnings dragged down other tech stocks this week. The stock had a 52-week range of $241.11 to $495.00, trading around $410 to $419 per share, as of the publication of this article. It advanced by 60.45% over the year and 9.94% in the last six months. The stock was also up 21.04% YTD. AVGO had a strong price trend in the short, medium, and long terms, with a poor value ranking as per Benzinga's Edge Stock Rankings. CrowdStrike Holdings Retail investors praised CRWD’s recovery following it post earnings slump. The stock had a 52-week range of $342.72 to $785.66, trading around $711 to $720 per share, as of the publication of this article. It advanced 56.13% over the year and 40.14% in the last six months. The stock gained 53.40% YTD. Benzinga's Edge Stock Rankings showed that CRWD had a strong price trend in the long, short, and medium terms. GameStop Retail investors on Reddit were super bullish on their favorite stock following GameStop’s strong earnings. The stock had a 52-week range of $19.93 to $30.61, trading around $21 to $23 per share, as of the publication of this article. It was down 25.64% over the year, lower by 2.96% over the last six months, and up 10.01% year-to-date. GME maintains a weak price trend over the long, short, and medium terms, as per Benzinga's Edge Stock Rankings, with a solid value score. Lululemon Several investors felt that Michael Burry was fooling the market by recommending LULU and making money off his Substack subscriptions. The stock had a 52-week range of $116.63 to $338.49, trading around $108 to $125 per share, as of the publication of this article. It declined by 62.73% over the year, and 31.96% over the last six months, and 39.89% YTD. According to Benzinga's Edge Stock Rankings, LULU was maintaining a weak price trend over the short, medium, and long terms, with a solid quality score. Retail focus blended AI infrastructure momentum, earnings beats, and geopolitical news-driven narratives with broader market action during the week.

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GameStop delivered a strong Q1, with net sales up 14% and a major shift toward higher-margin collectibles driving operational profitability. GameStop's $2 billion buyback and cost discipline signal strategic capital allocation, but the company's legacy hardware business continues to decline. GameStop's proposed $55 billion hostile bid for eBay faces major financing and strategic hurdles, making a successful takeover highly unlikely.

GameStop Today

$21.75 -0.43 (-1.96%)

As of 03:59 PM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$19.93▼

$28.10P/E Ratio16.47

GameStop NYSE: GME issued what would otherwise be a very bullish $2 billion buyback announcement, but investors should be more than skeptical.

The company sold those shares not too long ago, building capital for its next move. Assuming it follows through on the purchases, investors can only be left to wonder what’s going on.

Get GameStop alerts:

The reality is that GameStop’s board is trying to game the market, trigger a short squeeze, and get its price back in action.

$2 billion is a lot of money, worth more than 20% of the early June market cap, and a resounding signal of board confidence. GameStop also ended the quarter with $8.4 billion in cash (including cash equivalents and marketable securities), so it clearly has the balance sheet capacity to execute a sizable buyback.

However, with eBay NASDAQ: EBAY still (unwittingly) on the table, using $2 billion to repurchase shares appears out of step with the company’s broader strategy. Analysts are already doubtful the company can effect a takeover. As it stands, eBay’s board rejected the bid, but GME CEO Ryan Cohen is going after it anyway. What started as a 5% stake in February 2026 has grown to about 7.8% ownership through stocks and options.

The irony is that investing in eBay is among Mr. Cohen’s best moves as GameStop’s CEO. The stock is up approximately 30% from its February average, driven by its impressive turnaround. eBay is aggressively integrating AI, driving increased engagement, ads, and ad revenue, while focusing on its most lucrative niche markets, including collectibles. It benefits from increased exposure even if GameStop is unsuccessful.

Assuming success, the question then becomes execution, which is another questionable part of this story that could result in both companies' failures. So, $2 billion in share buybacks is a good thing, but only if they follow through.

GameStop Returns to Growth, Collectibles LeadsGameStop posted a decent fiscal Q1, with revenue up 14% to over $835 million, which beat analyst estimates of $767 million. The strength was driven entirely by collectibles, as the core hardware and software businesses continue contracting.

Hardware sales fell by over 3%, led by a 13% decline in software sales, while collectibles grew by 65%. Collectibles accounted for nearly 42% of the revenue and will be the critical segment moving forward. Gaming hardware is unlikely to become extinct, but games are shifting toward more cloud-based applications, meaning a reduced market size for legacy products, hardware, and software.

Margin news is the shining star of the report. GameStop’s revenue improvement was compounded by operational efficiencies, resulting in substantial bottom-line strength.

Core earnings grew by a triple-digit amount to set a company record, even when adjusted for one-offs. Looking forward, the company will likely sustain profitability, raising yet another question. If GameStop is on track for sustained improvement, why does it need eBay, other than to get more exposure?

The balance sheet brings more good news. The solid quarter led to positive cash flow and an increase in the capital reserve. Total company liquidity, excluding any credit lines, is approximately $9.7 billion, roughly equal to the company’s market cap. Debt is also up, but remains very low, at less than 1x equity.

A Short-Squeeze Is PossibleGameStop Stock Forecast Today12-Month Stock Price Forecast:
$0.00
-100.00% Downside

Reduce
Based on 2 Analyst Ratings

Current Price$21.75High Forecast$0.00Average Forecast$0.00Low Forecast$10,000,000.00GameStop Stock Forecast Details

Analysts, institutional, and short-interest data suggest a short-covering rally, if not a squeeze, is possible.

Analysts' coverage remains virtually non-existent, with only two tracked by MarketBeat. With one Sell and one Hold rating, the consensus rating is Reduce, but there was some optimistic chatter following the fiscal Q1 earnings release.

Skepticism about share buybacks was offset by comments on unexpected revenue and earnings strength and what they may mean for future quarters.

Institutional data is more obviously bullish, with them owning approximately 30% of the stock and accumulating shares. Low ownership or not, accumulation is a bullish sign that can put pressure on short sellers.

Short interest is the critical factor. It remains elevated around 14% as of early June, sufficient to cap gains in the absence of a bullish catalyst. The fiscal Q1 results provide such a catalyst and may lead to covering in upcoming quarters. Until then, GME shares are more likely to trade within the established trading range as clarity on company goals, strategy, and execution develops.

Risks for GameStop include eBay and its turnaround. A larger, more effective competitor, its established business has regained traction. It can dominate the collectibles market and has AI to help it. If GameStop can’t buy eBay or develop a plan to compete, the stock price will remain under pressure until something else changes.

Catalysts include advancing the eBay plan, continued traction in the core business, and a rebound in Bitcoin. Down more than 40% since purchase, Bitcoin’s performance has a significant impact on the company’s total value and the return it received on its capital. The cash balance is enormous but came at the cost of shareholder value; BTC losses erode the value.

Should You Invest $1,000 in GameStop Right Now?Before you consider GameStop, you'll want to hear this.

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