TLDR
- GameStop (GME) stock fell roughly 4% in premarket trading Tuesday after eBay rejected its $56 billion takeover bid.
- eBay’s board called the proposal “neither credible nor attractive,” citing doubts over financing.
- GameStop CEO Ryan Cohen offered to buy eBay with cash and stock, but GME is roughly a quarter of eBay’s size.
- Cohen has claimed a $20 billion debt financing commitment from TD Bank, contingent on investment-grade credit — which Moody’s said the deal would undermine.
- Notable investor Michael Burry sold his GameStop stake following the bid, warning of dilution and debt risk.
GameStop (GME) stock was trading down around 4% in premarket on Tuesday, hitting $22.26 ahead of the open, after eBay’s board officially rejected the company’s unsolicited $56 billion takeover bid.
In a letter to Ryan Cohen, GameStop’s chairman and CEO, eBay chairman Paul Pressler wrote: “We have concluded that your proposal is neither credible nor attractive.”
The rejection came after Cohen made the offer earlier this month, proposing to buy the online marketplace with a half-cash, half-stock deal. At the time, GameStop carried a market cap of around $12 billion — roughly a quarter of eBay’s size.
$EBAY REJECTED $GME’s unsolicited, non-binding takeover proposal after board review, calling it “neither credible nor attractive.”
eBay cited financing uncertainty, leverage and operational risks, valuation concerns and GameStop governance. https://t.co/hTjLRB8B6N pic.twitter.com/RTZjdcINcW
— Wall St Engine (@wallstengine) May 12, 2026
eBay’s board said it reviewed the proposal with independent advisors and flagged two key concerns: uncertainty around the financing plan and the potential damage to eBay’s long-term growth and profitability.
Financing Questions Loom Large
From the moment the bid landed, Wall Street questioned how Cohen planned to pull it off.
GameStop had roughly $9 billion in cash on its balance sheet. Cohen said he had a “highly-confident letter” from TD Bank for $20 billion in debt financing — but that commitment is contingent on the combined company maintaining an investment-grade credit rating.
That condition got complicated fast. Moody’s said last week the deal would be credit negative for eBay, throwing cold water on the debt financing piece.
Investors quickly priced in the likelihood of heavy dilution. To fund the gap, GameStop would likely need to issue new stock — something that has historically rattled GME holders.
Michael Burry, of “The Big Short” fame, sold his entire stake in GameStop after the offer was made, publicly warning the deal would saddle the company with debt and hurt existing investors.
eBay stock has been trading well below the offer price of $125 per share since the bid was announced, sitting around $107 before the bell Tuesday — the market effectively signaling skepticism from the start.
What Cohen Said — And Didn’t
Cohen’s case for the deal rested on cost-cutting and synergies. He argued that combining GameStop’s operational efficiency with eBay’s marketplace could create a stronger rival to Amazon.
He pointed to GameStop’s 600 U.S. stores as a physical network that could give eBay a differentiated edge. He also offered to serve as CEO of the combined company with no salary, no cash bonuses, and no golden parachute.
In a CNBC interview, however, Cohen struggled to articulate the financing details. When pressed, he said simply that the deal would be paid for with cash and stock — answers that left analysts and hosts visibly unsatisfied.
Next Steps
The rejection doesn’t necessarily end things. Cohen had previously said he was willing to take the offer directly to eBay shareholders, potentially by calling a special meeting — a move that could set up a hostile bid.
eBay, for its part, said its board is “confident the company, under its current management team, is well-positioned to continue to drive sustainable growth.”
As of Tuesday morning, GME was trading at $22.26 in premarket, down about 4%, while eBay stock was down roughly 1% to $107.
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