eBay has rejected a takeover bid from GameStop worth about $56 billion, calling the proposal “neither credible nor attractive.” The move ends, at least for now, one of the most surprising takeover attempts in the tech and retail world this year.
GameStop CEO Ryan Cohen revealed the proposal last week. He offered $125 per share in a mix of cash and stock to buy eBay, a company that is far larger than GameStop by revenue and market value.
EBay’s board rejected the offer in a letter signed by chairman Paul Pressler. The company said it reviewed the proposal with outside advisers and found major issues with the financing plan, the debt burden, and the operational risks tied to the deal.
The gap in size between the two companies remains one of the biggest obstacles. EBay’s market value sits above $48 billion, while GameStop is valued at roughly $10 billion. Even with GameStop’s cash reserves and planned financing, analysts questioned whether the retailer could realistically complete a transaction of this scale.
Cohen said GameStop secured a $20 billion financing commitment from TD Securities, part of TD Bank, and pointed to the company’s $9 billion cash position. But eBay argued that the financing package still leaves too much uncertainty.
Skepticism Mounts Over GameStop’s Bold Bid for eBay
A financing letter released by eBay added another concern. TD’s support depended on the combined company keeping an investment-grade credit rating from at least two major ratings agencies. That condition raised doubts about whether the funding would remain available if the deal faced financial pressure.
Moody’s Ratings also warned that the proposed acquisition would be “credit negative” for eBay because of the large amount of debt needed to complete the transaction.
Wall Street analysts reacted with similar skepticism. Many questioned the logic behind combining a video game retailer with an online marketplace. Several analysts said the companies share few clear business synergies.
Cohen tried to defend the proposal during an appearance on CNBC’s “Squawk Box,” but the interview raised more questions than answers. He gave limited details about how the company would finance the acquisition and pushed back against criticism from hosts and analysts.
“We are offering half cash, half stock, and we have the ability to issue stock in order to get the deal done,” Cohen said during the interview.
He also warned that if eBay refused to negotiate, GameStop could take the proposal directly to shareholders.
A Bold “Lopsided” Proposal Meets Board Resistance
In the original bid, Cohen argued that eBay has become inefficient under CEO Jamie Iannone. He said the company spends too much on marketing and staffing without delivering meaningful user growth.
Cohen proposed using GameStop’s 1,600 retail stores across the United States as hubs for eBay operations. According to the plan, stores could help authenticate products, fulfill orders, and support live-commerce events.
The idea reflects Cohen’s effort to position GameStop as more than a struggling retailer tied to physical video game sales. Since becoming CEO, he has pushed the company toward collectibles, trading cards, and digital commerce. Those categories overlap with parts of eBay’s marketplace business.
Still, eBay’s board made clear that it believes the company is already moving in the right direction.
In its response letter, eBay said management has improved execution, sharpened the company’s strategy, and strengthened the seller experience over the past several years. The company also pointed to its focus on higher-value categories such as collectibles, luxury resale items, and trading cards.
That strategy has helped eBay stand apart from larger rivals like Amazon, which dominates broader e-commerce categories.
Investors have also responded positively to eBay’s recent performance. The company’s stock has climbed 24% this year as its turnaround effort gains traction.
Analysts at Gordon Haskett described the proposal as a “lopsided marriage proposal” and said the odds of success were always low. They noted that eBay had little reason to accept an offer that carries major financing risk and uncertain strategic benefits.
For now, the takeover attempt appears stalled. But Cohen’s next move remains unclear. He could abandon the effort, revise the bid, or try to rally eBay shareholders against the company’s board.
Whether that strategy works is another question. Right now, most investors and analysts appear to side with eBay.
