GameStop CEO Ryan Cohen's $56B Plan to Take Over eBay

Ryan Cohen’s entrepreneurial story is rooted in recognizing overlooked opportunities, exacting operational discipline, and building obsessive, driven teams. His journey from a failed online jewelry venture to leading Chewy to a multibillion-dollar sale highlights his clear-eyed approach to value creation in competitive, low-margin consumer markets.

Cohen Founded Chewy, Recognizing an Underserved Market With Recurring Revenue Potential, Instead of Pursuing His Initial Jewelry Business Idea

Cohen initially set out to launch an online jewelry business, investing heavily in trade shows, inventory, and distribution without much knowledge of the field. The breakthrough came during a visit to a neighborhood pet store, where he realized he understood the pet product market deeply as a pet owner himself. This insight, alongside the observable recurring revenue from regular pet purchases and a fragmented market that Amazon and large chains like Petco and Petsmart hadn’t yet dominated, persuaded him to pivot to pet e-commerce.

Fragmented Pet Stores and Limited Amazon Scale Open Door for Direct-To-consumer Model

Cohen observed that neighborhood pet stores still flourished and Amazon, though selling pet supplies since the 1990s, had not reached scale in the category, signaling room for disruption with a direct-to-consumer model.

Cohen Fused Amazon's Supply Chain Efficiency With Local Pet Stores' Personalized Service Into a Hybrid Model

The vision for Chewy became clear: replicate the personal, knowledgeable service of neighborhood pet stores with the supply chain domination and best practices of Amazon. Fast shipping, wide selection, competitive pricing, and expert knowledge were combined into an online hybrid model, managed by pet owners passionate about the products and customers.

Cohen's Chewy Approach Focused On Cost Control, Supplier Negotiation, and the Criticality of Every Dollar in a Low-margin Retail Business

Cohen describes running Chewy as "a game of pennies," where success hinged on exceptional efficiency. He personally handled early Google Adwords campaigns, often late into the night, and negotiated directly with major suppliers. He stresses that maintaining transactional supplier relationships—rather than seeking to be liked—was vital, believing overpayment showed in gift-giving from suppliers, while aggressive negotiation led to complaints about contract fatigue.

Cohen Oversaw Business Tasks From Early Google Adwords Campaigns to Direct Supplier Negotiations, Understanding That Supplier Relationships Are Transactional and Overpayment Indicates Dissatisfaction

He emphasizes the transactional nature of supplier relationships and celebrates tough negotiation as evidence of paying the right price. He also managed key operational tasks from digital marketing to labor and warehouse optimizations, knowing Chewy was always up against world-class competitors like Amazon. For Cohen, success and failure separated at the margin—“pennies in the red is failure and pennies in the black is success.”

Success in Pet E-Commerce Hinges on Margin Efficiency, Warehouse Optimization, and Competitive Shipping

Cohen underscores that in online pet retail, winning requires relentless cost control, tight warehouse management, and efficient, competitive shipping.

Cohen's Hiring Philosophy Prioritized Drive and Determination Over Experience, Building Teams of Committed Operators Willing to Take Responsibility

Cohen looked for what he calls "will over skill" when hiring, prioritizing drive and determination above experience. He cites the example of a customer service leader who persistently applied despite lacking a traditional resume—her motivation and resilience made her an outstanding team member. Cohen sought out "psychopaths" in his own words, drawing together a core team of hard-charging, risk-taking self-starters as devoted to the mission as he was.

Cohen Values "Will Over Skill," Promoting Persistent Elder Care Leader Despite Rejections

He recounts promoting a woman from elder care with no direct experience because of her relentless determination, which he found more valuable than any credential.

Ideal Team: Motivated Risk-Takers & Self-Starters With Obsessive Commitment

Cohen’s ideal team members were diehards, fully committed and willing to take responsibility, in a culture where only “A’s put up with A’s.”

Cohen's Chewy Strategy: Exceptional Experiences Drive Word-Of-mouth Over Paid Marketing

Chewy’s loyalty and growth came from creating remarkable customer experiences. Cohen’s team ...

Ryan Cohen’s involvement with GameStop began by identifying value in a business widely dismissed by the market and led to a remarkable repositioning focused on operational efficiency, collectibles, and leveraging in-house talent. The results have been robust, with tangible gains in revenue and financial health.

Cohen's Gamestop Investment Stemmed From Identifying Value In a Business Dismissed As Obsolete by the Market and Short-Sellers

Cohen describes his investment philosophy as seeking out established but out-of-favor businesses with strong historical earnings that the market has written off. GameStop, continually shorted and considered essentially dead for over a decade, fit this mold. Rather than shying away from the widespread pessimism, Cohen saw opportunity in the fear, likening it to running into a burning house—often where distressed investors can find mispriced value.

Catalyst For Gamestop's Survival: New Playstation 5 and Xbox Series x Consoles Launch

Cohen’s original thesis was rooted in the cyclical nature of the video game retail business. He recognized that GameStop typically flourished at the start of a new console cycle, as with the upcoming launches of the PlayStation 5 and Xbox Series X. With expectations that consumers would flock to purchase new hardware and software, Cohen believed GameStop could survive on the strength of this cycle even as others wrote the business off.

Cohen Deemed the Market's Pessimism About Gamestop Appealing as Fear Signals Opportunities For Investors In Distress

He was drawn to GameStop specifically because the mainstream consensus and media expected its failure. Cohen notes that such deep-seated negativity is often appealing for investors who seek situations where widespread fear presents a chance to unlock hidden value.

Cohen's Transition From Investor to Ceo Was Driven by Leadership's Lack of Capability and Commitment

Cohen initially became a passive investor, owning less than 5%. The then-CEO, struggling with an activist, offered him a board seat, mistakenly assuming Cohen would be a passive ally. However, as Cohen’s stake grew and he went public with his concerns, he was compelled to take a more active role. Observing a leadership vacuum and lack of capability or commitment from existing management, Cohen felt he had to step in—transitioning from passive investor to board member and ultimately CEO.

Cohen's Misguided Approach: Using Chewy's Playbook on Gamestop, Ignoring Business Constraints

Initially, Cohen tried to transfer strategies from his time at Chewy, hiring e-commerce talent, and focusing on online expansion. However, this approach failed due to fundamental differences between pet supplies e-commerce and physical video game retail, including inventory dynamics and customer purchasing patterns.

Cohen Recognized Distinct Differences in Physical and Online Retail Dynamics, Prompting a New Strategy For Gamestop

After reviewing financials, Cohen quickly saw the Chewy playbook was unsuitable. He realized physical retail and gaming had unique constraints—unlike Chewy, overstock at GameStop led to costly markdowns and stagnant inventory. This learning prompted a sharp pivot in strategy.

Cohen Prioritized Cost Reduction and Operational Efficiency in Gamestop's Pre-owned Gaming and Collectibles Over Competing With Amazon on New Merchandise

Cohen shifted from an e-commerce focus to “maniacal cost cutting.” He ruthlessly cut inefficiencies, pared down excess, and doubled down on GameStop’s established strengths in pre-owned games and collectibles instead of trying to directly compete with giants like Amazon in selling new products.

Cohen Shifted From Failed E-Commerce Expansion To "Maniacal Cost Cutting," Eliminating Waste and Focusing On Gamestop's Competitive Advantages

This operational discipline focused GameStop on what it does best: retailing pre-owned gaming merchandise and building out its collectibles segment. Cohen’s approach highlighted practical execution over grand tech-driven disruption.

Cohen Shifts Gamestop Toward Trading Card Games and Sports Memorabilia Through Curation and Authentication

Cohen shepherded GameStop's expansion into trading card games (TCG) and sports memorabilia, emphasizing curation and authentication to appeal to collectors. Categories like TCG and sports cards have become major growth drivers.

Cohen Boosted Revenue By Reselling Graded Collectible Cards, Exchanged For Cash, Through Retail and Online Channels

Cohen implemented a model where customers could bring in graded PSA (Professional Sports Authenticator) cards—rated 8 and above—to any GameStop location and receive immediate cash. The company would then resell these cards either in-store or via online channels, mirroring the established trade-in model for games but applied to collectibles.

Cohen's Cash-For-psa Cards Program

This cash-for-PSA cards initiative broadened GameStop's pre-owned business. The transparent market value of graded cards mirrored the predictability that made their pre-owned game segment pro ...

Cohen Targets Ebay for Its Complementarity With Gamestop and His E-Commerce Expertise

Ryan Cohen emphasizes the complementary nature of eBay and GameStop, especially as GameStop moves further into the collectibles space. He notes both companies excel in secondary markets and collectibles, with GameStop operating in physical retail and eBay dominating the online arena. Cohen highlights shared interests such as consumer liquidity and authentication of secondhand items, pointing out eBay’s significant global scale and first-mover status as the online de facto marketplace. These overlaps, combined with categories where both companies perform strongly, solidify the strategic logic of the acquisition.

Cohen underscores that his expertise lies in e-commerce, developed during his time at Chewy, making him much more comfortable and effective with online models than traditional retail. This background equips him to understand and navigate eBay’s global online marketplace, turning the proposed combination into an ideal fit within his business capabilities and ambitions.

Cohen's Offer Gives Ebay Shareholders 50% Cash and 50% Gamestop Stock At a Premium, Maintaining Ebay Ownership and Gaining New Management

The bid for eBay, valued at $56 billion, is structured to avoid the need for external capital. Instead, Cohen leverages eBay’s own balance sheet, providing existing shareholders with half the value in cash and half in GameStop stock, offered at a premium to their current holdings. This approach is designed not only for financial practicality—eschewing the practically impossible task of sourcing $60 billion in cash—but also for strategic alignment.

By retaining eBay ownership via GameStop stock, current shareholders continue to benefit from eBay’s earnings in the near and medium term, but with the added advantage of new, e-commerce-focused management under Cohen. The strategy aims for both an immediate uptick in earnings potential and the promise of long-term value creation, particularly in high-growth areas not previously accessible under legacy management.

Cohen Suggests Cutting $2 Billion From Ebay's $5.5 Billion Expenses, Focusing On $2.4 Billion for Sales and Marketing

Cohen identifies operational inefficiency as a critical problem at eBay, particularly within its large expense base of $5.5 billion, including $2.4 billion spent annually on sales and marketing that, so far, yield negligible user growth. He proposes cutting $2 billion in costs, emphasizing that substantial savings can be achieved—especially in marketing—without harming the company’s core performance.

Cohen’s philosophy is to treat every dollar of operating expense as an investment that must generate measurable returns. By enforcing operational discipline and cost efficiency, he expects to deliver an immediate increase in earnings and set a foundation for sustainable profitability.

Cohen Targets Ebay's Live Commerce As a Major Revenue Source, Seeing a $400 Billion Market With Growth but Underdeveloped Execution

Cohen sees live commerce as one of the two principal growth vectors for eBay, pointing to its $400 billion total addressable market, rapid U.S. expansion, and popularity in Asia. However, he finds eBay’s current execution in live commerce notably lacking: even with ample users and brand presence, the platform itself is underperforming, with few hundred viewers per sale and complex barriers for creators to go live.

He notes eBay’s application process for content creators is cumbersome, the approval process slow, and the backend infrastructure problematic, discouraging creators and sellers. Cohen’s solution is to remove these barriers by simplifying creator onboarding and fixing backend technology, positioning eBay to better compete with rivals who are currently “crushing” the space.

Cohen to Use Gamestop's ...

Ryan Cohen delivers a pointed critique of Ebay’s management and board, contrasting their performance and approach against broader e-commerce growth and effective business practices. He argues that Ebay’s executive leadership prioritizes self-preservation and consultant advice over necessary operational improvements and direct seller engagement, all while experiencing clear business decline and ignoring accountability.

Ebay's Performance Has Declined Despite E-Commerce Market Growth

Ebay's Merchandise Value Down, User Base Shrinks by 30 Million; Earnings Decrease, Expenses Rise Versus Revenue

Cohen notes that every key Ebay metric has fallen since COVID. Gross merchandise value and operating earnings have declined, and Ebay has lost 30 million active users. Even as the overall e-commerce market grows, Cohen says Ebay’s business has stagnated in recent quarters with a revenue line that is “essentially break even.” Revenue is up only slightly, while operating expenses have risen significantly.

Ebay's Operating Expenses Exceed 50% of Revenues, Indicating Unsustainable Structural Inefficiency for Acceptable Capital Returns in a Capital-Light Model

Despite being a capital-light business with no inventory, Cohen highlights that Ebay’s operating expenses now exceed half of its revenues. He characterizes this as a structurally unsustainable position that produces inferior capital returns compared to what should be possible for a marketplace model, especially against the backdrop of industry growth.

Ebay's Management Alienates Sellers By Cutting Relationship Programs, Lacking Business Tools, and Ignoring Seller Success

Ebay Ends Concierge Service for Top Sellers, Prompting Shift to Other Platforms

Cohen criticizes Ebay’s approach to its seller community, stating that "they take their sellers for granted," having cut the concierge program for top sellers. This, he says, has led to sellers moving to other ecommerce platforms.

Sellers Must Use Costly Third-Party Tools On Ebay Due to Missing Basic Functions, Creating Friction and Reducing Competitiveness Against Amazon Seller Central

He points out that sellers must rely on a patchwork of costly third-party tools to run their Ebay businesses, in contrast to Amazon’s “soup-to-nuts” Seller Central solution. This lack of built-in functionality creates friction, reduces seller satisfaction, and diminishes Ebay’s competitiveness. Cohen asserts that in a marketplace model like Ebay’s, sellers are the core customers, and making them successful should be a clear business priority; however, Ebay does not provide the basic tools needed nor actively engages in solving their pain points.

Ebay Leadership Lacks Financial Risk or Ownership Stake, Misaligning With Shareholder Interests and Performance Accountability

Board Highly Paid, Little Stock, Few Meetings; Pay Not Tied To Success

Cohen calls out a fundamental misalignment between Ebay’s board and shareholders, arguing that board members are “making hundreds of thousands of dollars a year,” have minimal to no stock ownership, attend only a handful of meetings, and are highly compensated without their pay being tied to business success or outcomes.

Excessive CEO/Management Pay Amid Underperformance; Entrenched Structure Blocks Shareholder-Driven Change

He also contends that management is “grossly overpaid” while taking “zero risk.” Cohen points to a recent failed shareholder vote to reduce the threshold for calling a special meeting as evidence of a shareholder-unfriendly entrenched structure, blocking efforts at accountability and necessary change. He says, "Why is everyone so intent on protecting this entrenched management team and board to continue running the business?" referencing the culture of self-preservation and resistance to external input.

Ebay's Leadership Uses Consultants Over Seller Engagement and Operational Analysis to Diagnose Problems

Outsourcing Strategic Thinking to Consultants Over Addressing Root Causes

Cohen criticizes Ebay management for consistently turning to outside consulting firms rather than directly working with their own sellers and engineering teams to solve well-known and longstanding issues. He describes this as a lack of willingness to “roll up their sleeves,” preferring to outsource analysis and strategy instead of addressing true operational weaknesses.

Consultant Reliance Indicates Management's Inability or Unwillingness to Implement Basic Improvements For Revitalization

He sees this reliance on consultants as a sign of management’s inability or unwillingness to make “basic improvements” critical for company revitalization, asserting that “they're not making their sellers happy” and have lost the hands-on mentality common in founder-operated companies.

Ebay Board Rejects Cohen's Offer Over Financing Uncertainties and Concerns, Avoiding Alternative Value Discussions

Board Rejects Deal Over Financing Concerns, Despite Use of Ebay's Balance Sheet Without External Financing

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