GameStop may drop its $56 billion eBay bid and offer up its 1,600 stores in a partnership

GameStop's $56 billion bid for eBay may be on the verge of collapse, with the company's CEO Ryan Cohen reportedly considering a partnership instead of the acquisition. According to Bloomberg, Cohen is exploring a deal that would allow eBay to utilize GameStop's approximately 1,600 US retail stores. The partnership could enable both companies to capture a larger share of high-margin markets.

Cohen is also looking to secure seats on eBay's board as part of any potential agreement. However, a final decision has not been made, and Cohen may still consider other alternatives. Neither company has commented on the report. GameStop's interest in eBay emerged in early May when the retailer was valued at around $12 billion and eBay at approximately $46 billion.

Cohen submitted an unsolicited offer shortly after, proposing to purchase eBay shares at $125 per share in a cash and stock mix. The bid was deemed unattractive by eBay's board due to financing concerns, potential impact on growth and profitability, operational risks, proposed leadership structure, and GameStop's governance and executive incentives.

In response, GameStop increased its eBay stake from a 5% economic interest to 43.4 million shares, or 9.8%, making it eBay's second-largest shareholder after Vanguard. Cohen had previously proposed using GameStop stores for eBay-related services like drop-off, shipping, authentication, and live-commerce. Both companies have been expanding their presence in trading cards and other collectibles, creating a natural alignment.

GameStop's stock has decreased 28% since the offer was announced in May, while eBay has gained 7.6%.