After a 28% stock price drop, acquisition ambitions shrink? GameStop (GME.US) CEO reportedly considers abandoning eBay (EBAY.US) acquisition, shifting to joint venture partnerships.

Zhitong Finance APP has learned from informed sources that GameStop (GME.US) CEO Ryan Cohen is considering withdrawing the $56 billion acquisition offer made to eBay Inc. (EBAY.US).

According to these sources, Cohen is considering instead proposing a partnership or setting up a joint venture, allowing eBay to leverage GameStop's network of around 1,600 retail stores across the United States. This move could help both companies increase their market share in high-margin categories such as trading cards and collectibles.

The sources further added that as one of eBay's largest shareholders, if GameStop enters any form of cooperation, it will seek to secure a seat on eBay’s board of directors.

Since the acquisition offer was made in May, GameStop’s share price has fallen by 28%, while eBay’s has risen by 7.6%. The $125-per-share offer was comprised of 50% cash and 50% GameStop common stock.

On Friday, eBay shares closed at $111.98, giving it a market capitalization of about $49.8 billion. Including debt, its enterprise value is close to $54 billion.

The sources said GameStop has not made a final decision yet and Cohen may still evaluate alternative options. For now, representatives for both GameStop and eBay have not provided an immediate response.

This attempted acquisition marks a bold move for Cohen—GameStop previously acquired a 5% stake in this much larger e-commerce company. GameStop continued to increase its holdings, and according to compiled data, as of July 15 its stake had reached 9.75%, making it eBay’s second-largest shareholder, second only to funds under Vanguard Group Inc.

Although GameStop, headquartered in Grapevine, Texas, holds $8.4 billion in cash at its disposal, its market capitalization has shrunk to $8.6 billion.

Prior to this acquisition proposal, GameStop underwent a series of dramatic changes. As players increasingly shifted to online software purchases, this game retail chain has been steadily reducing its number of physical retail stores.

In 2021, GameStop was once at the center of a retail investor frenzy. Michael Burry, head of Scion Asset Management—who rose to fame for successfully shorting mortgages ahead of the 2008 financial crisis—held a bullish position on the stock around 2019, further fueling GameStop’s rally.

However, after GameStop made the acquisition offer for eBay, Burry stated that he had exited his entire position, citing concerns that GameStop could assume too much debt in order to finance the deal.

Despite facing challenges adapting to shifting consumer preferences, eBay's platform still handles around $80 billion in annual transaction volume. In the 12 months ended March 31, approximately 136 million buyers worldwide made purchases through the platform.