By Robbie Whelan
GameStop is preparing a takeover offer for the online marketplace eBay, The Wall Street Journal reported. If the videogame retailer succeeds, it won't be buying your dad's eBay.
Founded in 1995 as an online auction house for hobbyists by the billionaire computer scientist Pierre Omidyar, eBay has traveled a bumpy road over the past three decades, remaking itself several times in the process.
In its most recent incarnation, eBay caters to enthusiasts with a heavy focus on collectibles, from sports memorabilia to trading cards to antiques, as well as one-of-a-kind fashion items and sneakers.
Some of its business lines have potential overlap with GameStop. Last year at its annual meeting, GameStop said it was expanding its own collectibles business, including sports and Pokémon trading cards.
EBay has some 135 million active buyers globally and last year posted $11 billion in revenue, 8% higher year over year. Net profit was up slightly at about $2 billion. The company said in its most recent quarter that sales are being driven by value-conscious customers who don't always need to buy new, in-season goods. Wall Street has lately embraced the company's strategy, with the stock up around 50% over the past year.
GameStop Chief Executive Officer Ryan Cohen faces challenges in pulling off a deal for a much bigger company. EBay has a market capitalization of $46 billion, compared with about $12 billion for GameStop. Analysts said any transaction would likely require a large amount of debt financing.
"We see real challenges to structuring this deal," Bernstein analysts said in a research note following the Journal's report, adding that a transaction could pose risks for an eBay turnaround that it has said is going well. The company faces fierce competition not just from titans such as Amazon.com and Walmart but also Etsy, Craigslist, Temu and others.
EBay emerged from the bursting of the dot-com bubble in the early 2000s largely unscathed, prompting then-CEO Meg Whitman to remark that "eBay is to some extent recession-proof."
Yet the company stagnated while rival Amazon ate its lunch, first dominating online retailing, then entering and succeeding at a diner menu of related businesses, from logistics to cloud computing to on-demand streaming media.
EBay sought to diversify, buying PayPal in 2002 and the ticket resale site StubHub in 2007, but those moves failed to help the company keep pace in e-commerce. The company's market capitalization peaked in 2004 at around $75 billion. It spun off PayPal in 2015.
By the time eBay limped into the current decade, activist hedge funds were circling the company, trying to persuade its board to shed units they viewed as a drag on its overall value, including StubHub and its classified-advertising business. In 2020, eBay lost the second-place spot among the world's largest e-retailers to Walmart.
In recent years, eBay has taken steps to cut costs, expand its footprint into youth fashion and embrace artificial-intelligence tools to streamline its buying and selling processes. The San Jose, Calif.-based company owns its own data centers and has been investing heavily in GPUs, the graphics processors behind the generative-AI revolution.
EBay recently rolled out an AI feature called magical listings, allowing sellers to take a photo of an item for sale, which is then used by the platform's AI to fill in the details of a listing, including a suggested list price.
In February, eBay said it was buying the secondhand-fashion platform Depop from Etsy for $1.2 billion, a play to integrate more young consumers into the retailer's core business. Several days later, the company said it would lay off 800 workers, or roughly 6.5% of its global workforce.
The Depop deal was viewed as part of an effort to improve the quality of product offerings on eBay by attracting more sellers with the kind of high-end used goods that the platform was known for in the early 2000s.
"The average household has $3,000 to $4,000 of stuff that could be sold on eBay," Jamie Iannone, eBay's CEO since 2020, told Yahoo Finance in an interview last year. "Less than 20% of that is online."
In the first quarter, strong sales of collectibles such as trading cards, coins, toys, action figures and comic books drove a nearly 20% increase in revenue and higher profits compared with a year earlier, beating analyst expectations.
GameStop gained fame during the meme-stock craze of 2021, in which nonprofessional retail traders left idle by pandemic lockdowns bid up the stocks of beleaguered companies. It has been fishing around for expansion opportunities.
In 2023, the company named Cohen, the billionaire co-founder of the online pet food retailer Chewy, as its new CEO, as well as chairman. Cohen told the Journal in January that he aimed to turn GameStop -- whose shares had fallen 80% since the peak of the meme-stock mania in 2021 -- into a $100 billion retail behemoth by acquiring a publicly traded company. Any deal would be big, he said.
"It's ultimately either going to be genius or totally, totally foolish," Cohen told the Journal.
Write to Robbie Whelan at robbie.whelan@wsj.com
(END) Dow Jones Newswires
May 02, 2026 19:20 ET (23:20 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
