Why GameStop’s EBay Bid Makes More Sense Than What Meets The Eye - And It Involves Pikachu

• GameStop on Saturday disclosed a $56 billion bid to buy eBay.
• Ebay has doubled down on the trading cards category through major acquisitions.
• GameStop is shrinking its physical store footprint to sharpen its focus on online sales, an area where eBay has decades of expertise.

Retail traders and prominent investors, including Michael Burry, piled into the debate over GameStop’s $56 billion cash-and-stock bid for eBay, Inc.

With GameStop itself valued at around $12 billion – and holding roughly $9 billion in cash, Bitcoin, and securities – the ambitious price tag raised eyebrows. However, GameStop and eBay share more common ground than might appear at first glance.

GameStop has been steadily expanding its collectibles and trading cards business, which now accounts for about 30% of its sales – mirroring a core strength at eBay. 

Why GME Wants eBay?

Ebay has doubled down on the category through acquisitions such as TCGplayer (a trading cards marketplace) for $295 million in 2022 and auction house Goldin in 2024, accelerating its presence in the fast-growing trading cards segment.

Ebay, which competes with Amazon, Walmart, and Etsy, has pivoted in recent years to focus on enthusiast-driven categories such as sneakers, trading cards, and high-end goods like watches and handbags, as well as refurbished products.

GameStop sells trading cards with PSA grading, a third-party certification from Professional Sports Authenticator that verifies a card’s authenticity and condition. 

Because PSA-graded cards are standardized and trusted by collectors, they are highly liquid in secondary markets – meaning many of the cards sold through GameStop ultimately find their way onto auction platforms and resale marketplaces like eBay.

Pokemon cards dominate trading on both GameStop and eBay, followed by sports cards and Yu-Gi-Oh, driven by a mix of nostalgia and resale value.

GameStop itself is making big moves in the category; Last month, the company launched Power Packs, a digital trading card platform that lets collectors buy online packs, with offerings spanning Pokemon and major sports categories and pack prices ranging from $25 to $2,500.

Thirdly, GameStop is shrinking its physical store footprint to sharpen its focus on online sales, an area where eBay has decades of expertise.

GME-EBay Deal Details; Burry Reacts

The eBay acquisition proposal comes after GameStop Ryan Cohen discussed his intent to acquire a retail company back in January – investors have been on the edge of their seats since. GameStop has a 5% stake in eBay, which it has been accumulating since February. Its proposed offer comprises 50% cash and 50% GameStop common stock.

“EBay should be worth — and will be worth — a lot more money,” Cohen said in an interview with The Wall Street Journal. “I’m thinking about turning eBay into something worth hundreds of billions of dollars.” The executive added TD Bank had committed to provide up to $20 billion in debt financing towards the deal.

Meanwhile, noted investor Michael Burry, who has been accumulating GME stock, has urged Cohen to evaluate other potential acquisition targets, including Etsy (ETSY), Roku (ROKU) and Wayfair (W), among others. 

GameStop stock was up nearly 5% in the overnight session heading into Monday, while eBay stock was up 11%.

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