GameStop wants to reduce eBay marketing budget
Morgan Stanley similarly doubted the potential cost savings. “On the expense side, we also think the potential opportunities will be minimal as physical and digital businesses require different cost bases, as is the case for 3P marketplaces versus 1P wholesalers. To add another challenge, GameStop has already gone through a series of major cost cuts,” the research note said.
Analysts at Morgan Stanley expressed skepticism about “how a deal would be financed given the material valuation difference.” If completed, he said it could become the largest leveraged buyout ever, “surpassing the recently announced $55 billion Electronic Arts transaction.”
GameStop said eBay spent $2.4 billion on sales and marketing in fiscal 2025, but added only 1 million net active buyers, bringing the total to 135 million from 134 million. GameStop said it would cut $1.2 billion from eBay’s sales and marketing budget, arguing that current spending “is not generating more users in a marketplace with nearly universal brand recognition.”
GameStop proposed cutting $300 million from eBay’s product development expenses and $500 million from general and administrative functions. GameStop said the combined company would consolidate its finance, human resources, real estate, legal, IT and professional services to save money after the merger.
GameStop boasted about its own financial performance under Cohen, saying it “went from a net loss of $381 million in fiscal year 2021 to net income of $418 million in fiscal year 2025.” Meanwhile, eBay said in its press release today that its “board and leadership team are executing a focused strategy to drive sustainable growth and long-term shareholder value.”
eBay last week reported revenue of $3.1 billion in the first quarter of 2026, up 19 percent year over year. eBay’s GAAP net income was up 2 percent to $512 million.
GameStop, which is on a separate financial program, reported net sales of $1.1 billion in Q4 2026. That was down from $1.28 billion in the fourth quarter last year. GameStop’s Q4 net income also fell year over year, from $131.3 million to $127.9 million.
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