Dying GameStop Grabs for eBay

GameStop wants to slash eBay marketing budget

Morgan Stanley similarly doubted the potential cost savings. “On the expense side, we also think the potential opportunities would likely be minimal as physical and digital business require different cost bases, as do 3P marketplaces vs. 1P wholesalers. To add another challenge, GameStop has already undergone a series of large cost cuts,” the research note said.

Morgan Stanley analysts expressed skepticism about “how a deal would be financed given the material valuation gap.” If completed, they said it could end up as the largest leveraged buyout ever, “surpassing the recently announced $55 billion Electronic Arts transaction.”

GameStop said that eBay spent $2.4 billion on sales and marketing in fiscal 2025 but added only 1 million net active buyers, increasing the total from 134 million to 135 million. GameStop said it would cut $1.2 billion from eBay’s sales and marketing budget, arguing that the current spending “is not producing more users on a marketplace with near-universal brand recognition.”

GameStop proposed cutting another $300 million from eBay’s product development expenses and $500 million from general and administrative functions. The combined company will consolidate its finance, HR, real estate, legal, IT, and professional services after the merger to save money, GameStop said.

GameStop touted its own financial performance under Cohen, saying that it “moved from a $381 million net loss in fiscal 2021 to $418 million of net income in fiscal 2025.” eBay meanwhile said in its press release today that its “board and leadership team are executing a focused strategy to drive sustainable growth and long-term shareholder value.”

eBay last week reported Q1 2026 revenue of $3.1 billion, up 19 percent year over year. eBay’s GAAP net income was $512 million, up 2 percent.

GameStop, which is on a different fiscal schedule, reported net sales of $1.1 billion in Q4 2026. That was down from $1.28 billion in the prior year’s fourth quarter. GameStop’s Q4 net income also fell year over year, from $131.3 million to $127.9 million.