GameStop CEO Ryan Cohen's $56B Plan to Take Over eBay
Ryan Cohen, founder of Chewy and CEO of GameStop, discusses his $56 billion acquisition bid for eBay, detailing his operational philosophy, previous business successes, and strategic vision for transforming eBay through cost-cutting, live commerce expansion, and digital gaming marketplaces.
Summary
Ryan Cohen recounts his journey from starting an online jewelry business to founding Chewy, which he grew into a multi-billion dollar company by obsessing over supply chain efficiency, negotiating aggressively with suppliers, and maintaining negative working capital. He emphasizes hiring for will over skill and surrounding himself with highly motivated, committed individuals. After selling Chewy in 2017 for $3.35 billion, Cohen became an active investor, initially taking a passive stake in GameStop before joining the board with additional Chewy colleagues. When appointed CEO, he abandoned his initial strategy of replicating the Chewy playbook at GameStop, recognizing that physical retail required different operational approaches. Instead, he focused on cost-cutting, inventory discipline, and expanding into the collectibles category, which now represents 42% of GameStop's revenue at $350 million. Cohen's vision for eBay centers on three pillars: immediately cutting $2 billion in operating expenses from the $5.5 billion base, expanding live commerce (a $400 billion TAM where eBay has minimal presence), and creating a digital marketplace for in-game items to complement eBay's existing collectibles leadership. He attributes eBay's decline post-founder-operation to professional management teams that lack owner mentality, fail to support sellers with necessary tools, and outsource strategy to consultants rather than rolling up their sleeves. Cohen is putting $500 million of his own capital into the acquisition bid and expressed frustration that media and commentators want GameStop to fail while supporting entrenched eBay management despite his track record. He plans to pursue whatever escalation tactics necessary if eBay's board continues refusing engagement, including potential hostile tender offers or shareholder activism.
About this episode
<p>(0:00) David Friedberg intros GameStop CEO Ryan Cohen!</p> <p>(1:56) Building and selling Chewy for $3.35B, how to compete with Amazon in e-commerce</p> <p>(11:58) Post-Chewy life, activist investing, the road to GameStop CEO, expanding into collectibles</p> <p>(26:39) Why he wants to buy eBay for $56B: Massive potential, poor execution (slow growth, rising expenses, seller relationship failure)</p> <p>(43:58) Ryan's three-part vision for eBay: Cut costs, expand live commerce, create digital in-game collectible marketplace</p> <p>(49:33) Why eBay has rejected the offer, media bias against GameStop</p> <p>Thanks to our partners!</p> <p>AppLovin Ads — AppLovin's AI advertising platform reaches over a billion daily active users across mobile games. Full-screen video ads with a 35-second median watch time. Advertisers are profitably spending hundreds of thousands of dollars a day and advertiser access is still in closed beta. The window is open at <a href="https://applovin.com/ALLIN">https://applovin.com/ALLIN</a></p> <p>Nasdaq - Positioned at the nexus of technology and the capital markets, Nasdaq provides premier platforms and services for global capital markets and beyond with unmatched technology, insights and markets expertise. <a href="https://www.nasdaq.com">https://www.nasdaq.com</a></p> <p>Follow Ryan:</p> <p><a href="https://x.com/ryancohen">https://x.com/ryancohen</a></p> <p>Follow the besties:</p> <p><a href="https://x.com/chamath">https://x.com/chamath</a></p> <p><a href="https://x.com/Jason">https://x.com/Jason</a></p> <p><a href="https://x.com/DavidSacks">https://x.com/DavidSacks</a></p> <p><a href="https://x.com/friedberg">https://x.com/friedberg</a></p> <p>Follow on X:</p> <p><a href="https://x.com/theallinpod">https://x.com/theallinpod</a></p> <p>Follow on Instagram:</p> <p><a href="https://www.instagram.com/theallinpod">https://www.instagram.com/theallinpod</a></p> <p>Follow on TikTok:</p> <p><a href="https://www.tiktok.com/@theallinpod">https://www.tiktok.com/@theallinpod</a></p> <p>Follow on LinkedIn:</p> <p><a href="https://www.linkedin.com/company/allinpod">https://www.linkedin.com/company/allinpod</a></p> <p>Intro Music Credit:</p> <p><a href="https://rb.gy/tppkzl">https://rb.gy/tppkzl</a></p> <p><a href="https://x.com/yung_spielburg">https://x.com/yung_spielburg</a></p> <p>Intro Video Credit:</p> <p><a href="https://x.com/TheZachEffect">https://x.com/TheZachEffect</a></p>
Key Insights
- Cohen's supplier negotiation success at Chewy was measured by suppliers explicitly stating they never wanted to speak with him again, as this indicated he extracted optimal pricing rather than building comfortable relationships.
- Cohen's strategy at GameStop initially failed because he attempted to directly replicate the Chewy playbook to physical retail, not recognizing that low-inventory rapid-turnover pet supplies require fundamentally different operations than high-inventory physical retail with obsolescence risk.
- Cohen claims that existing eBay management team has created a self-defeating seller ecosystem by requiring sellers to use third-party tools outside eBay's platform, whereas Amazon Seller Central provides integrated end-to-end functionality.
- Cohen attributes eBay's stagnation to the transition from founder-operated business to professional management, arguing that professional managers engage outside consultants instead of directly solving problems with sellers.
- Cohen's eBay acquisition strategy involves offering 50% cash and 50% GameStop stock rather than all cash because GameStop's combined earnings power post-acquisition would come primarily from eBay operations.
- Cohen argues that live commerce represents a $400 billion TAM in which eBay has virtually no meaningful presence despite having the user base, brands, and platform infrastructure to compete with category leaders.
- Cohen proposes that eBay's 1,600 physical stores could function as content creation studios and fulfillment nodes for sellers and creators, extending the marketplace model without requiring eBay to hold first-party inventory.
- Cohen claims that eBay's board and management team lack owner mentality because board members make hundreds of thousands annually without buying stock with personal capital, and the CEO has sold tens of millions while never purchasing shares.
- Cohen identifies digital in-game items as a larger addressable market than eBay's physical collectibles marketplace, but notes that no existing platform currently provides liquidity for in-game digital items despite their widespread accumulation.
- Cohen attributes media and commentator skepticism of GameStop to their need to maintain credibility after collectively dismissing the company as merely a meme stock, making them unable to reverse course without admitting prior error.
- Cohen states that eBay management has rejected his acquisition bid citing financing uncertainty, despite the fact that the proposed financing would come from eBay's own balance sheet, making the rejection logically inconsistent.
- Cohen emphasizes that e-commerce growth in live shopping, Shopify, and social commerce has allowed new competitors to pick off significant market share from eBay, which has merely maintained its revenue base rather than growing with the broader market.
Topics
Transcript
Everyone hates GameStop. And it seems like everyone in the media basically wants us to fail and wants them to succeed. And you've got a board that's making hundreds of thousands of dollars a year. They don't buy stock with their own money. They end up showing up to a handful of board meetings and they're making a fortune. You've got a management team that is grossly overpaid. There's nothing more American than basically risking your own capital. So why does everyone want us to fail applovin started with an eight dollar domain and no vc funding they built anyway and became one of the largest ad platforms in the world now they're bringing that same engine to e-commerce through…
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