-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
GameStop (GME) has proposed acquiring EBAY for $125/share, or roughly $56B, funded with 50% GME stock and 50% cash (supported by $9.4B of existing liquidity and a $20B highly confident letter from TD Securities). This represents an ambitious, high-risk bid, given GME's ~$12B market cap relative to EBAY's ~$46B. GME's Ryan Cohen believes he can extract $2.0B in operating expense savings, driving EBAY GAAP operating margin from 20.5% to 38%-40% and GAAP EPS from $4.26 to $7.79 within one year. Beyond cost synergies, he sees GME's ~1,600 U.S. stores functioning as a national network for EBAY's authentication, intake, fulfillment, and live commerce operations. We view the strategic rationale as unconvincing and believe EBAY will command a higher valuation as its business has been booming in recent quarters. That said, a move to Hold appears prudent, particularly given the meme-stock dynamics that tend to follow GME. We raise our 12-month target to $120 from $85, based on 19.7x our 2026 EPS estimate of $6.08.