eBay Inc. rejected an unsolicited $55.5 billion takeover bid from GameStop Corp. Chief Executive Ryan Cohen on Tuesday, the online marketplace’s board describing the offer as “neither credible nor attractive” in a letter from Chairman Paul Pressler that ends a 10-day pursuit by the video-game retailer to mount what would have been one of the largest reverse-takeover bids in U.S. corporate history — a smaller company seeking to absorb a target roughly four times its market value.
Cohen, who has run GameStop since 2023 and holds substantial personal stakes in both companies, submitted the nonbinding offer May 3, valuing eBay at $125 per share in a structure that called for 50% cash and 50% GameStop common stock. The bid valued the entire eBay business at $55.5 billion. GameStop’s own current market capitalization is approximately $12 billion. The proposal positioned the combination as a vehicle to compete with Amazon.com across e-commerce, with Cohen publicly arguing the combined company would have the scale and balance sheet to challenge the dominant U.S. online retailer.
The eBay board moved quickly to reject.
“The Board, with the support of its independent advisors, has thoroughly reviewed your proposal and has determined to reject it,” Pressler wrote in the letter, made public Tuesday morning. “We have concluded that your proposal is neither credible nor attractive.”
Pressler cited four specific concerns underlying the rejection: eBay’s standalone growth prospects, “uncertainty” surrounding how the cash portion of the deal would be financed, GameStop’s governance structure, and GameStop’s executive compensation incentives.
“eBay’s Board is confident the company, under its current management team, is well-positioned to continue to drive sustainable growth,” Pressler added.
eBay has spent the past two years executing a turnaround under Chief Executive Jamie Iannone, with growth in luxury verticals, refurbished electronics, motors and parts, and pre-owned fashion driving recent quarter beats. The company’s first-quarter 2026 results, released last month, showed revenue growth above the broader marketplace category.
The financing question was central to the rejection.
Analysts at JPMorgan Chase, Morgan Stanley, and Wells Fargo had all flagged in client notes since the May 3 disclosure that GameStop, with roughly $4.6 billion in cash and short-term securities on its balance sheet as of the most recent quarter, would need to raise approximately $23 billion in new debt or equity to fund the 50% cash portion of the offer.
GameStop’s existing capital structure carries minimal debt, but the company’s revenue base of approximately $4 billion annually and modest operating profit would not support investment-grade financing at the size required. The deal’s structure would have required either substantial new equity issuance — diluting Cohen’s existing ownership — or below-investment-grade debt at high coupons in a 5%+ Treasury environment.
Cohen himself owns approximately 8% of eBay through a separate $2 billion-plus stake disclosed earlier this year through RC Ventures, his investment vehicle. The dual ownership created the unusual situation in which the GameStop Chief Executive was simultaneously a major shareholder of the target and the largest holder of the acquirer — a configuration that drove the eBay board’s concern about “governance and executive incentives.”
Pressler’s letter noted that the proposal’s structure, with Cohen as the controlling shareholder of both entities and the combined company, raised material questions about how minority-shareholder interests would be protected.
GameStop’s strategic logic for the offer drew skepticism from the analyst community from the moment of disclosure. GameStop has spent the past three years pivoting from pure video-game retail toward cryptocurrency, collectible cards, and a broader “lifestyle” merchandise mix, but the company’s quarterly revenue has continued to decline. The strategic case for combining a shrinking specialty-retail business with a global online marketplace at a $55.5 billion valuation — when eBay has spent the past decade earning a market multiple based on standalone execution — produced one of the most universally panned major M&A proposals of the year.
GameStop did not immediately respond to requests for comment Tuesday on the rejection. The company has indicated it may revise or repackage the bid, though without addressing the financing question that drove the rejection, prospects for a successful follow-up are limited.
Cohen has used social media in the past to press his case directly to public shareholders rather than working through the target’s board, a tactic that could produce a tender offer or proxy contest, though either route would face the same financing hurdle.
GameStop stock has traded down since the May 3 disclosure; eBay stock has traded roughly flat, suggesting the market never priced in a high probability of completion.
For the broader M&A market, the rejection is notable as another sign that boards across the S&P 500 and large-cap technology are willing to reject high-profile unsolicited bids in the current environment. Warner Bros. Discovery rejected Netflix’s earlier overtures before settling on the Paramount Global combination announced last week. Cohen’s public bid for eBay, and the swift rejection Tuesday, suggest that target boards now view financing-uncertain, structure-unusual proposals with substantially less patience than was the case during the post-pandemic deal cycle.
The next move in the GameStop-eBay dynamic will likely come from Cohen directly. With his RC Ventures stake in eBay giving him standing as a shareholder and his control of GameStop giving him a continued strategic platform, the question is whether he accepts the rejection as final or pivots to a tender offer, a proxy fight, or a different combination structure.
eBay, meanwhile, signaled in Pressler’s letter that the board considers the matter closed and the company’s standalone strategy validated.
JBizNews Desk
© JBizNews.com. All rights reserved. This article is original reporting by JBizNews Desk. Unauthorized reproduction or redistribution is strictly prohibited.
