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

Summary

Ryan Cohen uses the episode to tell the Chewy-to-GameStop-to-eBay story through the lens of founder-operator discipline, supply chain rigor, and ruthless cost control. He says Chewy succeeded because pet supplies were recurring, the category was fragmented, and the business was optimized around pennies of margin, direct sourcing, warehouse efficiency, and high-touch customer service. On GameStop, he says his initial thesis was surviving until the console cycle, but after taking control he abandoned the idea of simply copying Chewy and instead moved toward cost cutting, pre-owned retail, and collectibles. Cohen then lays out his eBay bid thesis: cut roughly $2B of costs, build out live commerce, and extend the marketplace into digital collectibles and in-game items. He argues eBay’s execution is weak versus Amazon-style seller tooling, but that its scale, brand, and secondary-market strengths make it an attractive turnaround target.

Notes

• GameStop is framed as an unpopular, under-owned business run by overpaid insiders who do not risk their own capital.
• Chewy started as an online jewelry idea before Cohen pivoted after realizing pet products were a category he understood better.
• The key Chewy insight was recurring demand in a fragmented pet market.
• Cohen says Amazon was the real benchmark from day one because supply-chain efficiency would decide the winner.
• Chewy scaled through supplier pressure, direct purchasing, warehouse optimization, and cheaper shipping.
• He describes the Chewy economics as a pennies-in-the-black business where small margin changes determined success or failure.
• Retention at Chewy came from sticky cohorts and high-touch service rather than pure price competition.
• The service stack included handwritten holiday cards, pet portraits, and 24/7 customer support.
• He stayed deeply operational at Chewy, including running AdWords late into the night and negotiating directly with suppliers.
• His hiring filter is will over skill, favoring relentlessness and drive.
• GameStop began as a passive investment below 5%, then crossed into activist territory after he exceeded that threshold.
• The original GameStop thesis was to survive into the next console cycle and benefit from tight supply.
• He says the attempt to transplant Chewy’s playbook to GameStop was wrong and had to be reversed.
• At GameStop he moved into maniacal cost cutting and focused on pre-owned retail.
• Collectibles became GameStop's lead category while software shrank to a small share of revenue.
• Trading cards fit GameStop's trade-in model because graded PSA 8+ cards can be bought back for cash.
• GameStop can buy back graded cards in-store for cash, then resell them through stores or warehouses.
• Cohen says eBay and GameStop are complementary around secondary markets, collectibles, refurbished tech, and authentication.
• eBay’s global scale and online authentication layer make it attractive as a marketplace asset.
• The eBay idea surfaced, as Cohen put it, while he was on the toilet.
• He views eBay as a first-mover marketplace that lost momentum as e-commerce matured.
• He says eBay could have been Amazon but did not keep pace with Amazon's model evolution.
• Amazon's seller economics are painful, but sellers accept them for access and volume.
• He rejects taking first-party inventory at eBay and prefers a pure marketplace.
• Focus, not multi-brand sprawl, is his preferred strategy for eBay.
• Since COVID, Cohen says eBay's major metrics have deteriorated: GMV, active users, earnings, and expense discipline.
• He says eBay sellers must rely on third-party tools because the platform lacks Amazon-grade seller infrastructure.
• Cohen blames some of eBay's underperformance on consultants and a management style that lacks owner-like urgency.
• His three-part eBay plan starts with cutting about $2B of costs.
• He says eBay spends about $5.5B on operating expenses and $2.4B on sales and marketing with little user growth.
• Live commerce is one growth vector, and he says the U.S. market is about $400B.
• He thinks eBay Live is underbuilt, hard to discover, and hampered by bad onboarding and backend systems.
• He says eBay should use its 1,600 stores as creator studios, fulfillment nodes, and authentication points.
• He wants to extend eBay into digital collectibles and in-game items with marketplace liquidity.
• He argues the market for digital items is larger than eBay's physical-items marketplace and has no incumbent.
• eBay rejected the offer citing uncertainty, including financing, but Cohen says the financing problem cuts both ways.
• He says the bid is not all-cash and that he does not have $60B sitting idle.
• He says he is committing $500M of his own money to the transaction and has not taken money out of GameStop.
• He attacks the incumbent board and management for high pay and no equity risk.
• He says institutional shareholders are generally aligned and see opportunity in the business.
• He says he will do whatever is required to win the deal.
• He says he is working with bankers and high-priced advisors.