eBay Inc.‘s board of directors on May 12 formally rejected GameStop Corp.’s unsolicited $56 billion acquisition proposal, calling it “neither credible nor attractive.” The decision dealt a blow to GameStop CEO Ryan Cohen’s ambitions and reignited debate over leverage risks in mega M&A deals.
$125 Per Share: 50% Cash, 50% Stock at a 46% Premium
Cohen floated the bid on May 3, offering $125 per share in a 50/50 mix of cash and GameStop common stock. That price represented a 46% premium over the unaffected closing price from early February, valuing eBay at roughly $56 billion. Yet GameStop’s own market cap was only about one-quarter of eBay’s size, raising immediate red flags on Wall Street.
Financing proved the biggest hurdle. GameStop relied on a “highly confident” letter from TD Securities for $20 billion in third-party debt, but Moody‘s Investors Service had already flagged the potential deal as credit negative. In a direct letter to Cohen, eBay Chairman Paul S. Pressler wrote that the board, after a thorough review with financial and legal advisors, found the offer lacking in several critical areas.
eBay Chairman Cites “Uncertainty Regarding Your Financing Proposal”
Pressler’s letter laid out the rejection criteria: “We have taken into account such factors as 1) eBay’s standalone prospects, 2) the uncertainty regarding your financing proposal, 3) the impact of your proposal on eBay’s long-term growth and profitability.” He noted that eBay already serves 136 million active users and generated roughly $11.6 billion in revenue in 2025, mostly from its commission and advertising streams. The board stressed that the current management can deliver value without the distraction of a risky merger.
eBay’s turnaround strategy—centered on high-value collectibles and authentication services—has gained traction, exemplified by the 2024 strategic partnership with Goldin Auctions. The board believes this path is safer and more predictable.
Cohen’s Vision: Zero Salary, 1,600 Stores as Hubs
Cohen pitched the merger as a way to challenge Amazon by using GameStop’s 1,600 U.S. stores as fulfillment and intake hubs while targeting $2 billion in annualized cost cuts within the first year. He even offered to serve as CEO of the combined company with no salary or bonuses, tying compensation solely to performance. Despite those promises, eBay’s board remained unmoved, pointing to governance and executive incentive issues at GameStop that would make combined leadership problematic.
Market Response: eBay Flat, GameStop Down 4%
Following the rejection, eBay shares barely budged—trading well below the $125 offer price since the bid was announced. GameStop shares, however, slipped roughly 4% in early trading as investors digested the failure. Notably, GameStop holds bitcoin on its balance sheet, a factor that has caught the attention of crypto observers. The company has used some of its bitcoin for covered calls as part of its treasury strategy.
The episode underscores growing skepticism toward large M&A deals involving significant size mismatches and contingent financing. Cohen had signaled a willingness to take his case directly to shareholders, but eBay’s firm stance makes a hostile path increasingly difficult. No further communications between the two parties have been scheduled as of the announcement.