Shares of eBay take off on a $56 billion buyout bid from GameStop’s Ryan Cohen

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Category: Business

Listening

Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. equity / ˈɛk wɪ ti / (n.) – the total value of a company when it is divided into many small, equal parts that people can buy and own
    Example:

    When the world’s economy has a hard time, big tech companies lose value, so their total equity value drops.


  2. outreach / ˌaʊtˈritʃ / (n.) – an effort to contact or talk with another person or group
    Example:

    We received no outreach from the office, so we did not know the meeting was canceled.


  3. annualized / ˈæn yu əˌlaɪzd / (adj.) – calculated to show what the total amount would be for a whole year, based on the amounts measured over a shorter time
    Example:

    Based on our first three months, our annualized energy cost will be around $1,200.


  4. revolving door / rɪˈvɒl vɪŋ dɔr / (idiom) – a situation in which the people who do a particular job or work for a company change very often, staying for only a short time before leaving
    Example:

    With three different managers in just six months, the leadership team became a revolving door.


  5. frenzy / ˈfrɛn zi / (n.) – a short time of great excitement and wild activity, in which people can't control their behavior
    Example:

    When the pop star arrived at the airport, the crowd went into a frenzy.


Article

Read the text below.

Shares of eBay are soaring before the opening bell as Ryan Cohen’s GameStop pursues an approximately $56 billion takeover of the company, seeing it as a vehicle to compete with online retail giant Amazon.


The national gaming retailer said that its approximately 1,600 U.S. stores could become drop-off and shipping locations. One proposal includes live sales broadcasts from GameStop locations featuring eBay products.


“eBay has the second-largest commerce franchise, and there’s a big opportunity to do something much larger,” Cohen said in a CNBC interview.


GameStop’s bid is $125 per share in cash and stock. The equity value of the proposed deal is $55 billion on paper.


eBay confirmed the huge bid and said that it had no talks with GameStop or received any outreach from the company before it received the proposal. The company’s board, along with financial and legal advisors, will review the offer and determine what course of action to take, eBay said.


GameStop said that it started accumulating shares in eBay beginning in February and currently has a 5% stake. The company is looking to lower costs at eBay, saying that the online seller spent $2.4 billion on sales and marketing in fiscal 2025 while only adding 1 million net active buyers. GameStop says it will achieve $2 billion in annualized cost cuts within a year of the proposed transaction’s closing.


Cohen, who owns about 9% of GameStop, would serve as CEO of the combined company. He would only be compensated based on the combined company’s performance.


Cohen became CEO of GameStop in 2023. At the time, the position had become a revolving door with the company trying to survive as streaming upended the gaming industry. GameStop became one of the most well-known meme stocks to create a frenzy among retail traders on Wall Street. The company’s shares took off in 2021 after a band of smaller-pocketed investors helped boost its stock by 1,000% in two weeks.


GameStop shares have fallen since then, but are still up more than 30% this year. Shares of eBay jumped more than 7% in premarket trading, while GameStop’s stock declined nearly 3%.


This article was provided by The Associated Press.


Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

  • GameStop is famous for selling video games in physical stores, but now it wants to buy eBay to compete with Amazon, an online shopping platform. In your opinion, is it better for a company to keep doing the one thing it does well, or is it necessary to try completely new businesses to survive? Why? Discuss.
  • As a customer, how would you feel if you went into a local GameStop shop to buy a game, but the workers were also using the store to pack, ship, or do live sales broadcasts for eBay products? Would this make you want to visit the store more or less? Why? Discuss.

Discussion B

  • The article says that the CEO position at GameStop became a “revolving door,” meaning many leaders came and went quickly. If a company is having a hard time, is it better to change leaders often to get new ideas or to keep the same leader so things stay stable and safe? Why? Discuss.
  • How do you think a company’s public image is affected when its top leadership position is a revolving door? Would you personally feel confident buying products or investing in a company that changes its leader very often? Why or why not? Discuss.