Ryan Cohen Isn’t Crazy: Buy eBay
Inside Today’s Issue
Essay: Sounds Like A Great Idea: Buy The Marketplace
Bigger Than All Tech IPOs Combined
What’s Behind Labor Productivity Growth
The Few Who Pull Up The S&P
Chart Of The Day… Franco-Nevada (FNV)
Today’s Mailbag
Ryan Cohen proposed buying eBay (EBAY) for $125 per share.
The GameStop (GME) CEO went on CNBC to explain the deal… and the anchors laughed at him. It became an internet meme. He was completely mocked.
Then eBay rejected the approximately $55.5 billion proposal as “neither credible nor attractive.” But of course they’d say that. If Cohen buys eBay, they are all out of a job…
Meanwhile, Cohen has bought an incredible amount of GameStop shares. His two latest purchases cost approximately $46.8 million, including $26.4 million on September 21, yesterday. These are among the largest open-market purchases I’ve ever seen any insider make. The people mocking Cohen on CNBC have never seen that kind of money in their lives. Cohen is betting massively that he can get this deal done. Should you?
Cohen has cut GameStop (GME) worldwide store count by 51.8%, while free cash flow (“FCF”) improved from a $496.3 million loss in fiscal 2021 to a $597.3 million gain in fiscal 2025. That’s a $1.09 billion FCF improvement in four years. That’s an incredible turnaround. Hey Target (TGT), take notes: close half your stores.
Why does Cohen want to own eBay…?
Cohen proposes making every GameStop location the place where collectibles are validated and processed – to create vastly more volume on eBay, while also reducing fraud. He explains…
We can increase intake by bringing a lot more product onto the platform.
Cohen’s prospective customer is the collector who never lists his collectibles because completing the sale requires tedious work: boxing and shipping, dealing with counterparties, cashing checks at the bank… and the risk of fraud.
If a collectibles listing service works correctly, the seller gets convenience, and the buyer gets greater confidence and less fraud. eBay earns fees on merchandise that would otherwise never enter its marketplace. And GameStop wins by helping to sell an item, whether through a service fee, a resale margin, or some negotiated share of the transaction.
GameStop is already in the trading-card collectible business. It helps customers package and send trading cards to PSA (Professional Sports Authenticator) for grading. PSA checks whether collectible cards are genuine and grades their condition, giving buyers an independent assessment of what they’re purchasing. PSA has a partnership with eBay. Collectors can have their cards graded, stored securely, and offered for sale on eBay without having the cards shipped back home first.
Thus, GameStop handles the first step, while PSA and eBay do the rest. Cohen could connect those services into one simple transaction: bring your cards to GameStop and let the companies handle the work of selling them.
