eBay’s board has officially turned down an unsolicited $56 billion takeover bid from GameStop, describing the proposal as “neither credible nor attractive” in a strongly worded letter addressed to CEO Ryan Cohen.
Signed by eBay Chairman Paul S. Pressler and later shared publicly, the letter said the board and its independent advisors carried out a detailed review of the proposal before rejecting it. The evaluation covered eBay’s growth outlook as an independent company, uncertainties around GameStop’s financing approach, potential effects on profitability and long-term growth, operational and management risks in a merged company, valuation considerations, and GameStop’s executive incentive and governance structure.
eBay was not the only party to view GameStop’s proposal as ambitious. At the time of the offer, GameStop’s market value stood at about $12 billion, compared with eBay’s valuation of roughly $46 billion. The proposed deal offered $125 per eBay share, evenly divided between cash and GameStop stock. eBay shares were trading near $104 before the proposal and were at $108.18 at the time of writing, while GameStop stock declined 1.25% to $22.88 following the announcement.
According to GameStop, the proposed acquisition would have been financed through a mix of balance-sheet cash, liquid investments, and external financing partners. However, there is still uncertainty over whether the company could obtain the full amount of funding required.
Several prominent investors have raised concerns about the financial risks tied to the proposed deal. Among them is Michael Burry, who has argued that the acquisition could leave GameStop carrying significant debt while diluting existing shareholders.
What happens next remains unclear. As CNBC noted, Cohen could still bypass eBay’s board and bring the proposal directly to shareholders if he decides to continue pursuing the deal.
A partnership between eBay and GameStop may initially seem unconventional, but potential synergies have prompted discussion around the idea. GameStop’s network of more than 600 U.S. retail locations could theoretically provide a combined business with additional logistical and customer-facing advantages against competitors like Amazon. Even so, eBay’s board has rejected the proposal in its current form.
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