GameStop’s CEO sacrificed a $35 billion pay plan. Here’s how it could impact his effort to buy eBay

This week, GameStop CEO Ryan Cohen reaffirmed his ambition to acquire eBay, but the specifics of how he plans to achieve this goal remain unclear. The video game retailer, which rose to fame as a meme stock in 2021, announced on Tuesday that its board approved Cohen's request to withdraw a proposed bonus plan that could have netted him up to $35 billion contingent on certain performance metrics. This marks the company's first significant update on the eBay acquisition effort since May, when Cohen revealed his bold proposal to purchase the e-commerce giant for $56 billion. eBay's board quickly rejected this offer, labeling it as "neither credible nor attractive," a sentiment echoed by the market, considering GameStop's current market capitalization is around $10 billion. Cohen, who took over as CEO in 2023, has led GameStop to profitability through rigorous cost-cutting measures, but he has yet to silence skeptics regarding his plans. The company previously announced it had secured a $20 billion financing commitment from TD Bank but provided little information on how it would bridge the remaining funding gap. In a candid interview with CNBC, Cohen suggested that the acquisition would be financed with a combination of cash and stock, stating that the company has the option to issue stock to facilitate the deal. Following the announcement, GameStop's shares plummeted by 10% and have continued to decline. In light of the circumstances, Cohen has now opted to eliminate a bonus plan that was revealed in January, which included a stipulation for GameStop's market cap to reach $100 billion for him to receive the full payout. The company's statement indicated that Cohen wants the leadership team to concentrate fully on GameStop's operational performance and the proposed acquisition of eBay. GameStop is expected to disclose a comprehensive presentation outlining the strategic rationale and operational plan for the eBay bid later this week. Eden Chen, a former scout for the venture firm Andreessen Horowitz, noted that by terminating the bonus plan, Cohen is alleviating concerns that his motivation for pursuing the acquisition was linked to personal financial gain. However, he added that the fundamental question remains: how can a $10 billion company successfully acquire one worth $50 billion? eBay, founded in 1995, is currently undergoing a turnaround strategy focused on specific categories like trading cards and collectibles. This approach has garnered investor approval, boosting eBay's stock by approximately 25% this year, following a 41% surge in 2025. In response to Cohen's initial offer, eBay's board expressed confidence in its current leadership, citing concerns over financing uncertainty and operational risks as reasons for rejecting the proposal. Despite these setbacks, Cohen has remained vocal about his intentions, defending the acquisition in public forums and through his social media accounts, prompting subsequent filings with the Securities and Exchange Commission from eBay. He has even hinted at the possibility of investing $500 million of his personal funds into the deal, though this would only cover a fraction of the financial shortfall. Experts like Brian Quinn from Boston College Law School view Cohen's offer as a distraction for eBay, emphasizing that unless GameStop presents a substantial cash reserve, the proposal lacks seriousness. Additionally, Cohen's bonus package faced criticism, leading to a proposed class-action lawsuit aimed at halting a shareholder vote on the matter until further disclosures were made. GameStop has responded by asserting the lawsuit's lack of merit and pledging to defend against it vigorously. According to Paul Nary, a management professor at the Wharton School, the withdrawal of the pay package suggests Cohen's commitment to pursuing eBay is genuine. However, he emphasized that many details about how this acquisition will materialize remain uncertain, sparking questions about the implications for GameStop shareholders.