Key Takeaways
- GameStop investors voted to expand authorized common stock to 2.5 billion shares, with nearly 69% voting in favor.
- The authorization enables GameStop to utilize stock issuance for its proposed $56 billion eBay takeover.
- eBay’s board dismissed GameStop’s initial offer in May, though GameStop has continued building its position.
- GameStop holds more than 4.3 million eBay shares directly and maintains options exposure to an additional 39 million shares through February 2028.
- GME shares are currently trading near $22.20, reflecting a year-to-date gain of approximately 10.6%.
GameStop has secured another critical approval in its ambitious effort to acquire eBay. During Tuesday’s 2026 Annual Meeting, investors voted to amend GameStop’s certificate of incorporation, expanding authorized Class A common stock to 2.5 billion shares.
The proposal succeeded with 68.7% approval from shareholders, providing GameStop with the flexibility to use equity as transaction currency.
Currently, GameStop trades near $22.20 per share with a market capitalization hovering around $9.94 billion. Meanwhile, eBay—the subject of GameStop’s takeover ambitions—commands a market cap approaching $50 billion, creating a classic underdog scenario.
Back in May, GameStop submitted an unsolicited, non-binding proposal to purchase all remaining eBay shares at $125 apiece—combining cash and GameStop equity—in a transaction valued at $56 billion. eBay’s board swiftly declined, dismissing the proposal as “neither credible nor attractive.”
CEO Ryan Cohen hasn’t backed down. He’s publicly stated his intention to appeal directly to eBay’s shareholder base, circumventing board opposition.
GameStop maintains direct ownership of 4,343,725 eBay shares and holds put/call option contracts providing economic interest in another 39,046,658 shares. With these options not expiring until February 23, 2028, GME has considerable time to execute its strategy.
In June, GameStop cleared the Hart-Scott-Rodino antitrust requirement, allowing the company to physically settle the underlying shares from its options positions instead of cash settlement—a move that subtly enhanced its leverage.
Fundamental Business Performance Shows Improvement
While the eBay acquisition attempt dominates headlines, GameStop’s underlying financial performance has shown marked improvement. First quarter results revealed adjusted EPS of $0.30, significantly exceeding the consensus estimate of $0.12. Revenue reached $835.3 million, representing 14% year-over-year growth and surpassing analyst expectations of $766.64 million.
The company delivered record net income of $389.6 million, with collectibles highlighted as a major growth driver.
Last month, the board authorized a $2 billion share repurchase program, and Cohen removed a potentially substantial performance award from consideration, emphasizing management’s focus should remain on operational execution and the eBay pursuit.
Analyst Perspective
Wall Street analysts have expressed doubt about the feasibility of a $56 billion acquisition proposal from a company valued at $10 billion. GameStop’s shares currently trade above InvestingPro’s Fair Value calculation, placing it on an “overvalued” list—a consideration eBay investors would likely scrutinize when evaluating a deal involving GameStop equity.
No definitive agreement exists for the proposed transaction, and GameStop has not obtained access to eBay’s financial records or due diligence materials.
GME shares closed Tuesday’s regular trading session down 2.46%, though they ticked slightly higher in after-hours activity following news of the shareholder vote outcome.
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