GameStop Corp (NYSE: GME) shares traded slightly higher Thursday afternoon, gaining 1.02% to $18.16. The movement follows investor assessment of a major debt conversion and ongoing speculation regarding its proposed $55.5 billion acquisition of eBay.

The stock remains near its 52-week low of $17.79, having declined approximately 15% over the past month. Trading activity reflects market digestion of two significant corporate developments from August.

Debt Conversion and Balance Sheet Impact

On Aug. 3, GameStop announced a private exchange agreement to convert roughly $1.4 billion of its convertible senior notes into Class A common equity. The transaction is scheduled to close in September 2026.

The debt swap eliminates long-term interest burdens and deleverages the balance sheet. However, the prospective equity issuance introduces short-term share dilution pressure, which has weighed on sentiment recently.

Acquisition Speculation and Cash Position

Market participants continue to evaluate whether GameStop will withdraw its proposed $55.5 billion acquisition offer for eBay. Speculation suggests the company may pivot toward pursuing a joint retail partnership instead.

Regardless of the strategic direction, GameStop maintains a fortified cash position exceeding $3.5 billion. These funds are available to support core retail initiatives and digital trading card programs.

What the Numbers Show

The company’s cash reserves of over $3.5 billion significantly exceed the immediate dilution impact of the $1.4 billion debt conversion. This liquidity buffer provides operational flexibility while management navigates the uncertainty surrounding the eBay transaction structure.

GameStop Corp. (NYSE: GME) is considering withdrawing its $56 billion takeover bid for eBay Inc. (NASDAQ: EBAY) in favor of a strategic partnership or joint venture, marking a significant pivot in the videogame retailer’s aggressive acquisition strategy. This development addresses concerns regarding the scale of the original acquisition while offering a pathway for both companies to capitalize on complementary strengths in physical and digital retail. Bloomberg reported on Monday that GameStop CEO Ryan Cohen is weighing this proposal, citing people familiar with the matter.

The proposed collaboration would enable eBay to utilize GameStop’s roughly 1,600 U.S. retail locations. This arrangement aims to help both entities gain market share in high-margin categories, specifically trading cards and collectibles. As one of eBay’s largest shareholders, GameStop would also seek board representation as part of any such partnership structure. GameStop has not made a final decision, and Cohen retains the option to pursue other alternatives.

History of the Acquisition Offer

GameStop submitted a non-binding proposal on May 3 to acquire all outstanding eBay stock for $125 per share in a cash-and-stock deal. The structure was 50% cash and 50% GameStop common stock. eBay’s board rejected the offer, calling it “neither credible nor attractive.” Despite the rejection, GameStop disclosed in a regulatory filing that it built a 9.8% stake, holding 43.4 million eBay shares. In a subsequent filing, GameStop stated its leadership team remains focused on advancing the proposed acquisition, noting that additional materials are forthcoming.

During an interview with Bloomberg TV, Cohen declined to comment on whether GameStop planned to raise its offer, stating, “I’m not going to negotiate against myself.” He added, “I’m not going to call my shots, but we’re coming for eBay one way or another,” indicating he would take the plan directly to stockholders.

Financial Position and Market Reaction

The shift in strategy comes amid divergent stock performance since GameStop’s initial offer in May. During this period, GameStop shares have fallen 28%, while eBay shares have climbed 7.6%. As of July 15, GameStop owned 9.75% of eBay, positioning it as the company’s second-largest shareholder behind Vanguard Group funds.

GameStop holds approximately $8.4 billion in cash reserves, which could be deployed toward a deal, although its own market value has declined to about $8.59 billion. eBay’s market capitalization stands at about $49.83 billion. Notably, investor Michael Burry exited his entire GameStop position after the eBay bid was announced, citing concerns about the debt GameStop might incur to fund the transaction.

Stock Performance Comparison

At the time of publication on Monday, eBay shares were trading 3.63% lower at $107.92, while GameStop shares were trading 0.84% higher at $19.33, according to Benzinga Pro data. The opposing price movements reflect market speculation regarding the likelihood of a merger versus a collaborative partnership.

What the Numbers Show

The divergence between GameStop’s cash reserves of $8.4 billion and its market capitalization of $8.59 billion underscores the premium embedded in its valuation relative to its liquid assets. Furthermore, the 28% decline in GameStop’s stock since May contrasts sharply with eBay’s 7.6% gain, suggesting that the market views the standalone value of eBay more favorably than the combined entity under the proposed acquisition terms. This dynamic supports the rationale for exploring a partnership model that preserves shareholder value without the dilution associated with a stock-heavy takeover bid.