eBay has officially rejected a bold $56 billion takeover attempt from video game retailer GameStop, citing concerns over the financing structure and the feasibility of the deal.
The move highlights growing tensions between the two companies as GameStop CEO Ryan Cohen signals he may escalate the offer directly to shareholders.
The proposed acquisition — a mix of cash and stock — would have seen the $12 billion GameStop attempt to acquire eBay, a company valued at nearly four times its size.
However, eBay leadership expressed skepticism about the financial backing and overall viability of the proposal.
Market skepticism and investor backlash
The bid has already faced strong resistance from investors and analysts, many of whom questioned the logic of the deal from the outset.
eBay shares have reportedly been trading around $20 below the implied offer price of $125 per share, reflecting doubts that the transaction would ever be completed.
Prominent investor Michael Burry, known for predicting the 2008 financial crisis and featured in The Big Short, fully exited his GameStop position following the announcement.
He described the acquisition strategy as “pedestrian” and raised concerns over debt exposure and potential shareholder dilution.
Cohen pushes aggressive expansion strategy
GameStop CEO Ryan Cohen is reportedly positioning the acquisition as part of a broader transformation strategy.
His vision includes applying GameStop’s cost-cutting model to eBay and integrating GameStop’s roughly 1,600 U.S. retail locations into a hybrid physical-digital commerce network to strengthen eBay’s competitiveness against companies like Amazon.
He has also suggested the deal could be financed through a combination of up to $20 billion in debt facilities reportedly linked to TD Securities, alongside equity issuance from GameStop itself.
Cohen has defended the proposal as a long-term value play, arguing it could “build a much larger business” by combining eBay’s marketplace infrastructure with GameStop’s retail footprint.
Possible hostile takeover ahead
Following eBay’s rejection, market watchers believe GameStop may pursue a hostile takeover attempt by appealing directly to shareholders.
Cohen previously indicated he is willing to bypass eBay’s board if negotiations fail.
Despite the ambition behind the offer, analysts continue to question whether GameStop has the financial strength to execute such a large-scale acquisition without significant risk.
