eBay Finds GameStop’s Financing Proposal Unattractive, Turns Down Takeover Bid
In Focus
- GameStop submitted a half-cash, half-stock takeover bid to eBay
- eBay rejected GameStop’s bid over uncertainty in its funding proposal
- Analysts and investors had doubted the deal would work
- eBay about four times bigger than GameStop
eBay has rejected GameStop’s takeover bid. GameStop had a half-cash, half-stock bid which investors and analysts had doubted would work. eBay is nearly four times larger than GameStop. The e-commerce giant has a market capitalization of more than $48 billion, compared to GameStop’s $11.29 billion.
Why Did eBay Reject Ryan Cohen’s Takeover Bid?
eBay turned down GameStop’s acquisition bid over uncertainty of GameStop bid financing proposal. GameStop CEO Ryan Cohen submitted an unsolicited $56 billion offer to acquire eBay. The deal was structured as a 50-50 mix of cash and stock at $125 per share, representing approximately a 20% premium.
“The Board, with the support of its independent advisors, has thoroughly reviewed your proposal and has determined to reject it. We have concluded that your proposal is neither credible nor attractive. eBay’s Board is confident that the company, under its current management team, is well-positioned to continue driving sustainable growth,” eBay Chairman Paul Pressler stated in a letter to Cohen.
eBay also cited concerns over operational risks in GameStop’s corporate restructuring and the debt burden resulting from the proposed transaction. GameStop had acquired a $20 billion financing commitment from TD Bank. Although the videogame firm had approximately $9 billion in cash, the financing gap was still substantial.
Cohen’s Special Meeting Option
eBay’s rejection of GameStop’s proposal could trigger a hostile bid from Cohen. The GameStop CEO has previously said that he was ready to take the offer to eBay shareholders, possibly through a special meeting.
According to Cohen, merging eBay with GameStop could help to reduce costs and build synergies that create a larger enterprise. Cohen further argued that he could replicate GameStop’s cost-cutting measures and leverage the company’s network of 600 stores across the U.S. to enhance eBay’s profitability and make it a strong competitor for Amazon.
GameStop and eBay both sell collectibles but have different mainstay businesses. eBay generates revenue by liking sellers to buyers online without holding inventory. GameStop, on the other hand, buys collectibles wholesale and resells them in its physical stores.
Last week, eBay suspended Cohen’s account citing activity that it believed was risking its community. The action came after a publicity stunt in which Cohen listed personal items on the platform to finance the eBay takeover proposal. The listings had attracted tens of thousands of bids.
What are Investors Concerned About?
Since GameStop announced its eBay takeover bid, Cohen has declined to provide further information on how the video game firm would finance the deal. This has raised investors’ concerns about potential shareholder dilution from the volume of new shares issued to make up for the equity portion of the deal.
GameStop stock plunged 4.2% in pre-market trading on May 12, 2026, while eBay shares dropped 0.9%. eBay stock has been trading below its $125 offer price since GameStop announced the acquisition bid earlier this month.
