In a significant strategic move, GameStop Corp. (NYSE: GME) has disclosed a 9.8% ownership stake in eBay Inc. (NASDAQ: EBAY), a position valued at $4.86 billion as of last Friday's close. The disclosure came after U.S. markets closed for the weekend, setting the stage for investor reaction on Monday, July 20.
The stake's value is remarkably close to GameStop's own market capitalization. With GameStop shares ending the session at $21.89 and using the company's June 5 share count of 448.7 million, its implied market value stood at approximately $9.82 billion. The eBay holding therefore represents nearly half—49.5%—of GameStop's entire equity value.
The financial leverage is stark: for every $1 swing in eBay's stock price, the value of GameStop's stake shifts by $43.4 million, which translates to roughly 9.7 cents per GameStop share. This creates a direct and volatile link between the two stocks, a dynamic that investors will be watching closely.
GameStop finalized the settlement of 39.047 million eBay shares on July 17, converting derivative holdings into voting shares. The total cost of building the stake, including net premiums, was $3.965 billion. At eBay's Friday close of $112.06, the position shows a notional profit of about $410 million—already exceeding GameStop's fiscal 2025 adjusted EBITDA of $345.4 million. The company's initial outlook for fiscal 2026 projects adjusted EBITDA to top $600 million.
The stake was built using working capital, with GameStop reporting $8.37 billion in cash and marketable securities as of May 2 and no debt for the acquisition. In June alone, the company purchased 3.516 million eBay shares for $381.3 million.
The disclosure comes amid an ongoing takeover saga. GameStop Chair and CEO Ryan Cohen has proposed acquiring eBay at $125 per share, with payment split evenly between cash and GameStop stock. eBay Chair Paul Pressler dismissed the proposal as "neither credible nor attractive." Cohen has stated he plans to invest $500 million in the deal and secured a nonbinding $20 billion financing letter, though he noted, "I'm not going to negotiate against myself."
Market reaction last week was mixed: GameStop gained 1.0%, while eBay slipped 4.4% and the S&P 500 lost about 1.6%. GameStop's weekly trading volume dropped 15% from the prior week.
Looking ahead, eBay's next earnings report is scheduled for August 5. Investors will be monitoring for updated regulatory filings, board responses, and additional financing details. The risks are significant: if the bid fails, GameStop's balance sheet will remain heavily exposed to eBay's share price volatility. Any revised agreement could also involve taking on additional debt or shareholder dilution.
