May 4 appeared to be one of those Mondays that traders remember for years. A different ticker, eBay, was rising in the opposite direction as GameStop’s share price fell to $23.84 by the closing bell, down more than ten percent for the day. When placed side by side, the two charts revealed a narrative that the majority of Wall Street professionals were still attempting to understand.
The announcement of GameStop’s unsolicited, nonbinding offer to purchase eBay for approximately $56 billion late on Sunday night served as the catalyst. Even by itself, the figure was shocking. The math behind it was even more bizarre: GameStop, which has a market value of just under $12 billion, was trying to acquire a business that was almost four times its size. Half cash and half stock, with part of the work being done by a $20 billion financing letter from TD Bank. Ryan Cohen proposed that additional shares would be issued to cover the remaining amount.
| GameStop Corp — Key Information | Details |
|---|---|
| Ticker Symbol | NYSE: GME |
| Current Price | $23.84 USD (−10.14%) |
| Market Capitalization | $10.69 Billion |
| 52-Week Range | $19.93 – $35.81 |
| P/E Ratio | 31.29 |
| Headquarters | Grapevine, Texas |
| CEO | Ryan Cohen (since Sep 2023) |
| Founded | 1984, Dallas, Texas |
| Annual Revenue (2024) | $3.82 Billion |
| Employees | 12,000 |
| Industry | Video Game & Consumer Electronics Retail |
It’s difficult to ignore the market’s response. There was no applause from investors. They made sales. GameStop shares began to decline minutes after the morning’s opening, and Cohen’s appearance on CNBC’s “Squawk Box” seemed to exacerbate the situation. Cohen frequently rerouted viewers to the company’s website rather than going over the financing structure live during the tense, occasionally combative interview. Even sympathetic shareholders seem to have desired more clarity than they received.
Here, the background is important. After all, GameStop is the original meme stock. In early 2021, retail traders on Reddit caused its share price to rise by almost a thousand percent in just two weeks, turning the company into a sort of cultural phenomenon. Even though the more general fundamentals have moved on, some of that energy is still present on the ticker, lingering in forums and social feeds. The company’s balance sheet shows about $9.4 billion in cash, which is an impressive buffer for a physical retailer. However, a $56 billion deal cannot be closed with cash alone.
In general, Cohen argues that eBay is not making enough money. He cited the ratio of just one million net new active buyers to the $2.4 billion eBay spent on sales and marketing in fiscal 2025, which he described as inefficient. He contended that stricter cost controls might eventually double profits.
The Michael Burry detail came next. The Wall Street Journal reported that same day that the Big Short-famous investor had discreetly sold his whole stake in GameStop. One of the most well-known skeptics in the market was leaving at the exact moment the company went for the fences, making the timing seem almost theatrical.
As this develops, the larger picture starts to take shape. After the bid, eBay’s stock increased by roughly 5%, closing close to $109, significantly less than the $125 offer. The market uses that gap as a polite way of expressing its doubt that the deal will close. Despite the Monday decline, GameStop’s stock is still up more than thirty percent for the year. In recent memory, the price reached a 52-week high of $35.81.
Whether Cohen has the runway, regulatory approval, or shareholder mandate to move this forward is still up in the air. The board of eBay has pledged a thorough examination. Meanwhile, markets are pricing the doubt before the dream, as they always do.
