eBay Rejects GameStop’s $56 Billion Takeover Bid as “Neither Credible nor Attractive”
eBay formally rejected GameStop CEO Ryan Cohen's unsolicited $56 billion takeover proposal on May 12, 2026, with the board calling the offer “neither credible nor attractive.” The decision came roughly a week after Cohen made the unexpected bid, pitching a merger between GameStop's physical retail footprint and eBay's online marketplace as a path to building a stronger rival to Amazon.
Why eBay Walked Away
eBay board chairman Paul Pressler addressed the rejection in a letter sent directly to Cohen, stating that the board reached its decision after considering eBay's “standalone prospects,” the “uncertainty” regarding how the deal would be financed, and GameStop's “governance and executive incentives,” among other factors.
Pressler outlined six specific considerations that shaped the board's decision. Each one pointed to a different layer of financial and strategic risk.
- eBay's standalone growth prospects
- Uncertainty surrounding GameStop's financing plan
- The deal's negative impact on eBay's long-term growth and profitability
- Leverage and operational risks a merger would create
- Valuation concerns stemming from those risks
- Questions about GameStop's governance structure and executive pay incentives
“eBay is a strong, resilient business that has delivered meaningful results over the past several years,” Pressler wrote in his letter filed with the SEC. “We have sharpened our strategic focus, strengthened execution, enhanced our marketplace and seller experience, and consistently returned capital to shareholders.”
The Numbers Behind the Deal
On May 3, GameStop submitted a nonbinding offer to acquire eBay for $125 per share, comprising 50% cash and 50% GameStop common stock, valuing eBay at $55.5 billion. The size gap between the two companies drew immediate skepticism from Wall Street. eBay's market cap stood at just over $48 billion, while GameStop's was roughly $10.3 billion.
To fund the deal, Cohen pointed to a combination of sources. Cohen pointed to a $20 billion debt commitment secured from TD Securities, a TD Bank subsidiary, alongside approximately $9.4 billion in cash GameStop had on its balance sheet as of January 31, 2026. The option to issue additional GameStop stock also factored into the proposed financing structure.
The TD Securities letter, though, came with a condition that analysts identified as a major problem. A key condition in the financing letter from TD Securities would require the combined entity to maintain an investment-grade credit profile. Moody's Ratings said the proposed acquisition would be “credit negative” for eBay because of the substantial increase in leverage implied by the deal structure.
Investor Michael Burry sold his entire position in GameStop after the proposal was announced, writing that the debt load required to complete the deal was incompatible with his investment thesis for the company. He calculated that leverage would reach about 7.7 times debt to EBITDA at the proposed valuation, a level he described as bordering on distressed.
Cohen's Vision for the Combined Company
Cohen framed the merger as a way to create a genuine competitor to Amazon. Among the operational arguments Cohen advanced: a promise to extract $2 billion in annual savings from eBay within twelve months of closing, and a vision for GameStop's approximately 1,600 domestic store locations to take on authentication and order-fulfillment roles within eBay's marketplace.
At the time of the announcement, Cohen stated he envisioned himself running the resulting company as chief executive, forgoing both a salary and cash bonuses in favor of pay linked exclusively to how the merged business performed.
The CNBC Appearance That Raised Red Flags
Cohen made an awkward and at times combative appearance on CNBC's “Squawk Box,” where he offered few details on how he would finance the deal. Many analysts and investors described the exchange as a missed opportunity to build confidence in the proposal. Cohen offered limited clarity on the structure during the interview, repeatedly directing viewers to the company's website for details, saying “We are offering half cash, half stock, and we have the ability to issue stock in order to get the deal done.”
How the Two Companies Differ
eBay and GameStop operate on fundamentally different business models, and the gap between them became a central point of debate. eBay runs an online marketplace connecting buyers and sellers directly, with no inventory on hand. GameStop purchases goods in bulk and sells them through physical retail locations.
This cautious approach from eBay's board reflects the company's preference for its existing turnaround plan, centered on high-value collectibles and authentication services. In 2024, the company formed a strategic partnership with Goldin Auctions. GameStop, on the other hand, has spent recent years closing stores and shifting toward digital sales and collectibles, a transformation still in progress.
What Comes Next
Cohen said he was prepared to take the offer directly to shareholders if eBay declined to engage. A hostile takeover attempt or proxy campaign remains a possible path forward.
eBay shares peaked at $111.38 after Cohen announced the bid, still well below his proposed $125 per share, and closed at $108.13 on the day before the rejection. GameStop stock fell 4% following concerns over the $20 billion debt plan.
GameStop did not immediately respond to a request for comment. With the board firmly opposed, Cohen faces a difficult choice: push forward with a direct shareholder appeal, or step back from a deal that has already drawn widespread skepticism from analysts, investors, and ratings agencies alike.
