EBay has rejected GameStop's $56 billion takeover offer, describing it as 'neither credible nor attractive.' The proposal included a mix of cash and stock but was deemed financially uncertain by eBay’s board. GameStop had offered to acquire the online marketplace for $125 per share but fell short in explaining how it would finance the deal.
Key Takeaways
EBay has rejected GameStop's $56 billion takeover offer, calling it 'neither credible nor attractive.' The proposal included a mix of cash and stock but was deemed financially uncertain by eBay’s board. GameStop CEO Ryan Cohen hinted at potentially launching a hostile bid if his offer is not accepted.
- EBay rejects GameStop's $56 billion takeover offer, calling it 'neither credible nor attractive'
- GameStop offered to acquire eBay for $125 per share but fell short in explaining how it would finance the deal
- GameStop shares have fallen by more than 12% since the takeover offer was made public
- EBay's stock has improved by 50% in the past year, raising questions about why shareholders would want to swap their eBay stock for GameStop shares
- Ryan Cohen told The Financial Times last week, 'The more [eBay] fights me, the more … I’m not going to take no for an answer,' hinting at a potential hostile bid
The rejection comes after GameStop CEO Ryan Cohen hinted at potentially launching a hostile bid if his offer was not accepted. Despite this threat, eBay remains confident in its current management team and strategic direction, which has focused on categories like trading cards and collectibles.
GameStop's shares have fallen by more than 12% since the takeover offer was made public. Cohen’s proposal included plans to cut costs, use GameStop’s retail stores for eBay’s operations, and create synergies between the two companies. However, analysts and investors have expressed skepticism about the feasibility of such a deal.
The proposed acquisition has drawn attention from both Wall Street and retail investors, many of whom view Cohen as a hero after his role in the 2021 short squeeze that targeted hedge funds like Melvin Capital. Despite this support, eBay’s board remains steadfast in its decision to reject the offer.
According to The Guardian, GameStop's proposal included $28 billion in cash and $20 billion represented by a non-binding 'expression of confidence' from Canadian TD Bank. The bank expressed confidence that GameStop could raise the money if it received an investment-grade rating from two top credit agencies, though this is seen as uncertain due to the financial leverage required for such a transaction.
EBay's stock has improved by 50% in the past year, raising questions about why shareholders would want to swap their eBay stock for GameStop shares. Ryan Cohen told The Financial Times last week, 'The more [eBay] fights me, the more … I’m not going to take no for an answer,' hinting at a potential hostile bid.
According to Al Jazeera, eBay has underscored its turnaround efforts under CEO Jamie Iannone have boosted growth, with its stock returning 201 percent since Iannone took the position six years ago. EBay Chairman Paul Pressler stated that GameStop’s bid raised concerns about financing, long-term growth, and leadership structure of a potentially combined company.
GameStop did not immediately respond to requests for comment on the rejection. Analysts have doubted whether the half-cash, half-stock bid from the $12 billion video game retailer would close. EBay stock has been trading far below the offer price of $125 per share since the bid was made this month.
According to The Los Angeles Times, eBay's board said in a statement that it rejected GameStop’s unsolicited takeover offer after considering various factors, including how it could impact growth and profitability. The San José company expressed confidence in its current management team to drive sustainable growth and deliver long-term value for shareholders.
The rejection sets back video game retailer GameStop’s bold ecommerce ambitions to take on bigger rivals such as Amazon. As of Tuesday, GameStop has a market cap of $10 billion, much lower than EBay's $48-billion market cap. Questions still swirl around whether GameStop could afford to buy eBay and compete with Amazon.
GameStop announced it offered to acquire eBay for $125 per share in cash and stock earlier this month. The proposal represented a 46% premium to EBay’s closing price on Feb. 4, according to a news release from the company. GameStop also started buying eBay shares and has a 5% stake in the company.
A letter from investment bank TD Securities to GameStop said that it was 'highly confident' that the company would raise up to $20 billion to fund the deal. Cohen told The Wall Street Journal that the company planned to take the offer directly to shareholders if eBay wasn’t open to the proposal.
GameStop has been grappling with the rise of online shopping, closing roughly 470 stores nationwide in January. The company’s revenue for fiscal year 2025 totaled $3.63 billion, down roughly 5% compared to the 2024 fiscal year. As GameStop slashed costs, its net income grew to $418.4 million.
EBay has also been trying to cut back while adapting to changes in the ways people shop. The company plans to acquire fashion marketplace Depop from Etsy for $1.2 billion in cash to reach young consumers. In February, EBay announced it would lay off 6% of its workforce, roughly 800 jobs.
On Tuesday, eBay’s share price rose 2% to around $110. GameStop’s stock fell more than 3% to roughly $22 per share.
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