GameStop’s CEO Is Walking Away From a $35 Billion Payday to Chase eBay

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Ryan Cohen is doing two things at once that look contradictory until you stare at them long enough. He is walking away from a roughly $35 billion compensation package tied to GameStop (NYSE:GME) stock performance, and he is using the very stock that would have minted that fortune as the currency to chase a target almost five times GameStop’s size. CNBC’s Dominic Chu reported that Cohen “is passing on a 30-billion pay package and will unveil more details soon about his bid to take over” eBay (NASDAQ:EBAY). The number is around $35 billion now.

What the $35 billion number is

The figure traces back to a CEO Performance Award that vests only if GameStop’s share price climbs to extraordinary heights. GameStop’s own Q1 FY26 disclosure flags “CEO Performance Award dilution risk if stock options vest and are exercised” as a material risk factor. This is the polite SEC way of admitting Cohen could one day own a vastly larger share of the company.

Forgoing it now does two things. It removes a governance overhang at the exact moment a target board is calling his pitch unserious. And it lets Cohen tell eBay shareholders his interests sit alongside theirs, even as he pursues a deal that would dilute GME holders further. The optics matter because every proxy fight Cohen has involved himself into has leaned on the same argument that incumbent management’s performance was lackluster against their pay. Carrying a nine-figure incentive package into a hostile bid would have handed eBay’s board a ready-made counterattack.

The bid, the rejection, and the math problem

Cohen surfaced the offer on May 4, 2026, at $125 per share, a $55.5 billion deal structured 50% cash and 50% stock, with $9.4 billion from GameStop’s cash reserves plus a $20 billion “highly confident letter” from TD Securities. A highly confident letter is a bank’s expression of belief that it could raise the money, well short of an actual commitment to deliver it. eBay’s board took eight days to respond and called the offer “neither credible nor attractive” on May 12.

The valuation gap is the part that won’t move. eBay’s market cap sits near $49.3 billion, against GameStop’s $9.6 billion. eBay’s trailing PE is 25x on real $11.6 billion in revenue and $4.33 of diluted earnings per share. The minnow is bidding for the whale and promising to make the whale faster afterward. Even granting Cohen full credit for GameStop’s $7.4 billion cash pile and the $4.2 billion convertible notes raised in FY25, the gap between available currency and required consideration runs into the tens of billions — a hole that only a richly valued GME stock can fill.

How GameStop’s own results complicate the story

Cohen has a legitimate operating tailwind to point at. GameStop’s Q1 FY26 release showed revenue of $835.3 million, up 14% year over year, collectibles revenue up 65% to $348.9 million, and gross margin expanding to 40.7%. GAAP net income of $389.6 million included a $268.4 million unrealized gain on a derivative asset linked to eBay economic exposure, so the eBay trade is already showing up inside GameStop’s income statement before any deal closes.

The company is sitting on $7.4 billion in cash against $3.75 billion in convertible notes. Collectibles, now nearly 42% of sales after growing 65% year over year, are the operating story Cohen would prefer investors to focus on; the derivative gain is the financial-engineering story they cannot help but notice.

What the smart skeptics are saying

Michael Burry exited his GameStop stake in early May, arguing the bid “shatters” his thesis of GameStop as a debt-free, Berkshire-style compounder. Steve Eisman aligned with him, telling reporters “the debt is the problem” and warning that the cash-and-stock structure is “highly improbable” given the size mismatch. Polymarket bettors agree. The market “Will GameStop acquire eBay?” trades at 13.5% Yes, expiring December 31, 2026.

Two of the most prominent short-side voices of the last decade lining up on the same side of a deal is not in itself a verdict, but it does narrow the audience Cohen has to convince.

What to watch from here

Cohen has already pushed his stake in eBay to roughly 7.8% as of early June and signaled a proxy contest if the board keeps stonewalling. GameStop is asking shareholders to authorize 2.5 billion shares, a balance you only request when you plan to spend it. Meanwhile GME shares are down 19% since May 1, while EBAY is up 6.6% over the same window.

The market is pricing the dilution as real and the deal as fantasy. Cohen, by giving up the pay package, is betting that the next round of details changes that ratio. The next catalysts to watch are the proxy filing window, any movement on the Depop close that would shrink eBay’s float, and whether GameStop’s June repurchase authorization gets deployed to defend the stock currency Cohen needs.

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