New York, NY - EBay has formally rejected GameStop's $56 billion acquisition bid, calling it 'neither credible nor attractive.' The offer, made earlier this month, was a combination of cash and stock from the much smaller video game retailer, which is valued at just $12 billion.
EBay Chairman Paul Pressler stated the board is confident in the company's current trajectory and management team. The rejection came as EBay's stock has traded well below the offer price of $125 per share.
GameStop CEO Ryan Cohen, who has been a hero for retail investors since the 2021 short squeeze, had the backing of a $20 billion debt financing commitment from TD Bank, but the offer was contingent on the combined company achieving an investment-grade rating. Moody's has already flagged the deal as credit negative for EBay.
Cohen has argued that merging the two companies could create synergies, including using GameStop's 600 U.S. stores to enhance EBay's physical presence against Amazon. However, analysts and investors have expressed doubts about the deal's financing and viability.
The rejection could lead to a hostile bid, with Cohen indicating his willingness to take the offer directly to shareholders. The situation is further complicated by notable investor Michael Burry, who sold his GameStop stake after the bid, warning it would saddle the company with debt and dilute shareholders.