GameStop (GME) shares fell roughly 4% in premarket trading on Tuesday after eBay’s board unanimously rejected its $56 billion unsolicited takeover bid. The rejection, which eBay called “neither credible nor attractive,” sent GME to $22.26, while eBay (EBAY) slipped 1% to $107.
The proposal, made earlier this month by GameStop Chairman and CEO Ryan Cohen, offered a half-cash, half-stock deal at $125 per share. At the time, GameStop’s market capitalization was about $12 billion—roughly a quarter of eBay’s. Cohen touted potential synergies and cost-cutting, arguing that combining GameStop’s 600 U.S. stores with eBay’s marketplace could challenge Amazon. He also volunteered to lead the combined entity with no salary, bonuses, or golden parachute.
Financing doubts quickly took center stage. Cohen stated he had secured a “highly-confident letter” from TD Bank for up to $20 billion in debt financing, but that commitment depended on the combined company maintaining an investment-grade credit rating. Moody’s warned the deal would be credit negative for eBay, casting serious doubt on the financing structure. With only $9 billion in cash on GameStop’s balance sheet and a multi-billion-dollar shortfall, investors feared heavy stock dilution—a recurring pain point for GME holders.
Those concerns intensified after Cohen’s appearance on CNBC, where he struggled to detail the financing plan. When pressed, he repeated that the deal was “half cash, half stock,” an answer that drew widespread mockery online and became a meme. Prediction markets on Polymarket saw the odds of Cohen acquiring eBay plunge to just above 20%.
The skepticism was echoed by notable investors. Michael Burry, famed for “The Big Short,” sold his entire GameStop stake after the bid, warning about debt and dilution risks. Meanwhile, eBay’s board letter emphasized uncertainty around financing, operational integration risks, and potential damage to eBay’s long-term growth. The company expressed confidence in its current standalone strategy.
Cohen has not ruled out taking the bid hostilely to eBay shareholders, but the market reaction has made immediate prospects dim. GameStop’s stock has now erased all gains from the takeover announcement, leaving investors to question whether Cohen will persist or pivot to another acquisition target.
