The Clock Is Ticking on GameStop’s eBay Acquisition Play as Warrants Near Expiration
GameStop quietly disclosed a $4.9 billion eBay stake while 59 million warrants sit underwater with weeks until expiration, and whether Ryan Cohen can pull off the biggest retail comeback deal in history may hinge on a single stock price crossing…
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GameStop (NYSE:GME | GME Price Prediction) used its second-quarter results release to answer the question two prior 24/7 Wall St. articles left open. GameStop CEO Silent on Mega-Deal as It Beats Earnings, Stockpiles Cash asked whether the balance sheet could actually fund a deal. GameStop’s Next Big Move Could Matter More Than Its Earnings laid out four watch items. The Q2 FY27 8-K filed September 8, 2026, disclosed approximately 43.4 million shares of eBay (NASDAQ:EBAY) common stock valued at approximately $4.9 billion, and its risk factors reference a proposed acquisition of eBay. Chair and CEO Ryan Cohen held no call and issued no guidance.
Balance Sheet, Restated
The release reported cash and equivalents of $4.85 billion, down 41.8% year over year, alongside the eBay stake. Long-term convertible debt is approximately $2.8 billion following a post-quarter retirement, and the company disclosed outstanding 0.00% convertible senior notes due 2030 and 2032.
Grading the Four Watch Items
Collectibles delivered: $356.3 million in net sales, up 57% year over year, representing 45.1% of net sales. Revenue fell to $790.2 million, down 18.7% year over year, which the company attributed to the prior-year Nintendo Switch 2 launch, planned store closures, and the France divestiture. Cash deployment answered itself in the eBay line item. The warrants remain outstanding.
Operating Quality
Reported operating income reached $160.2 million, up 141.27% year over year, with a gross margin of 43.7% versus 29.1% and adjusted EBITDA of $174.0 million versus $75.7 million. The full-year adjusted EBITDA outlook was raised to more than $650 million from more than $600 million. GAAP net income of $298.7 million was boosted by a $166.3 million gain on a derivative asset and a $72.1 million unrealized gain on the equity investment, partly offset by a $75.0 million loss on digital assets. Adjusted EPS of $0.27 matched consensus and strips those items out.
Concentration You Did Not Choose
The release itself flags concentration of the investment portfolio in eBay common stock at $4.9 billion. eBay trades at $108.30, up 24.3% year to date. The unrealized gain exists only on paper.
October 30 Warrant Deadline
The approximately 59 million warrants distributed carry a $32.00 exercise price and could raise up to approximately $1.9 billion if fully exercised. They expire October 30, 2026. GameStop trades at $22.76, up 25.0% over one month and 13.4% year to date, well below the strike. Polymarket puts the probability of a GameStop-eBay acquisition at 0.065. Cohen’s $26.4 million share purchase disclosed September 21, 2026, lifted the stock but not near $32.
Watch two things before October 30: whether GameStop refiles or extends the warrant terms, and whether the stock closes any single session at or above the strike. A sustained move above $32 would signal the $1.9 billion warrant proceeds are in play. Absent that, acquisition funding must come from the existing cash pile or new debt, not the warrants.
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Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.
Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community.
Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.
Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, moderating workshop sessions at regional conventions.
