GameStop (GME) disclosed a nearly 10% economic interest in eBay (EBAY) through a combination of direct shares and cash-settled derivatives, escalating a takeover campaign that eBay’s board has already rejected as “neither credible nor attractive.”
For shareholders in both companies, the filing signals that GameStop CEO Ryan Cohen is willing to press toward a proxy fight rather than walk away from his $56 billion unsolicited offer, a posture that introduces meaningful governance risk for eBay investors and potential dilution risk for GameStop holders. 1
Key Takeaways
- GME holds ~10% economic stake in EBAY via shares and put/call pairs.
- Hart-Scott-Rodino clearance obtained June 3, enabling physical share settlement.
- Cohen signals direct appeal to eBay shareholders after board rejection.
Stake Structure & Market Context
According to a Rule 425 filing dated June 5, 2026, GameStop directly owns 827,648 eBay shares and has entered the long side of American-style put/call option pairs covering an additional 39,046,658 shares, expiring February 23, 2028, for a combined economic exposure of roughly 39.9 million shares. 1 At eBay’s approximate float of 444 million shares, that translates to just under 10%-a threshold that places GameStop in rare company among activist acquirers targeting large-cap e-commerce names.
eBay’s market capitalisation sits at roughly $25 billion to $27 billion based on recent trading, while GameStop’s offer of $125 per share values eBay at approximately $56 billion on a fully diluted basis-a premium that underscores the scale of financing Cohen would need to assemble. By comparison, activist campaigns against peers such as Etsy and Coupang have historically topped out at single-digit percentage stakes before triggering board-level negotiations.
Regulatory Milestone Unlocks Physical Settlement
A critical structural shift occurred on June 3, 2026, when the Hart-Scott-Rodino antitrust waiting period expired, satisfying what the filing called the “HSR Act Condition.” 1 Prior to that date, GameStop’s put/call pairs could only be settled in cash, meaning the company held economic exposure but no voting or dispositive power over the underlying shares.
With the condition now cleared, GameStop has the option-but not the obligation-to elect physical settlement, which would convert its derivative exposure into actual eBay common stock and grant full voting rights. That conversion would make GameStop the largest active voting shareholder in eBay, ahead of passive index funds that dominate the top of the register.
Cohen’s Case Against eBay Management
Speaking to Barron’s in an interview published June 5 and subsequently filed with the SEC, Cohen framed his pursuit in shareholder-alignment terms. 1 “It’s not surprising,” he said of the board rejection. “We presented a highly credible offer, and it’s exactly what you would expect from a professional board and management team that isn’t aligned with shareholders.”
Cohen argued that eBay’s operating metrics have deteriorated across every meaningful measure and said he would target $2 billion in cost reductions if a deal closed. He drew a direct parallel to his own restructuring of GameStop, which he said posted its best first-quarter operating earnings in company history ahead of the Barron’s interview. 1
Governance Route Narrows After Annual Meeting
One avenue Cohen appeared to be monitoring-eBay’s Proposal 4, which would have lowered the special-meeting threshold from 20% to 10%-failed to pass at eBay’s June 17 annual meeting, according to a subsequent Yahoo Finance report. 2 Had that measure passed, a 10% holder could have called a special shareholder meeting to force a board vote.
With that pathway closed, analysts said Cohen’s most likely next steps involve either building above 10% to maintain pressure, filing proxy materials to nominate directors at the next annual meeting, or negotiating directly with large institutional holders. GameStop has not confirmed any definitive agreement or financing package, and no formal tender offer has been launched.
Outlook
Cohen indicated in the Barron’s interview that he views the dispute as ultimately one for eBay shareholders to resolve. “The board and the management team cannot run and hide forever,” he said. 1 Whether GameStop elects physical settlement of its derivatives-and the voting firepower that would follow-is likely to be the next material catalyst investors watch.
GameStop has not received access to eBay’s books and records, cautioned in its filing that no definitive agreement exists, and noted that required shareholder and regulatory approvals for any full acquisition remain outstanding. 1
Not investment advice. For informational purposes only.
References
1Connor Smith (Jun 5, 2026). “Ryan Cohen Is Ready to Talk About eBay. For Real.” – filed as Form 425 by GameStop Corp. SEC EDGAR. Retrieved July 17, 2026.
2(Jun 19, 2026). “GameStop and eBay Tensions Rise After Key Shareholder Vote Fails”. Yahoo Finance. Retrieved July 17, 2026.