eBay’s board of directors has officially rejected GameStop’s unsolicited bid to acquire the e-commerce company, bringing a bitter end to one of the year’s most obscure business stories.
In a press release issued Tuesday morning, eBay’s board called GameStop CEO Ryan Cohen’s proposal “dishonest and unattractive,” citing concerns about GameStop’s financial plan, operational risks of the combined company, and questions about GameStop’s management and executive motivations.
The rejection letter, signed by eBay board chairman Paul Pressler, was vague. The board said it has considered the possibilities of eBay’s independence and concluded that the company is better off on its own, than with a clear strategy and management team already in place.
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For anyone who has been following the saga, eBay’s skepticism was entirely predictable.
GameStop, the mall-based video game retailer that became a popular meme stock after a brief Reddit push in 2021, announced on May 3 that it is making a surprise bid to buy eBay per share — a 46 percent premium to eBay’s closing price in Feb. 4 – worth 55.5 billion dollars.
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GameStop’s response to an acquisition valued at nearly five times the company involved a combination of $9.4 billion in cash, up to $20 billion in third-party financing from TD Securities, and GameStop common stock for the remaining balance. The company also quietly picked up a 5 percent stake in eBay in the months before the announcement.
The funding figures have left analysts unconvinced, and CEO Ryan Cohen has done nothing to help matters. In a viral CNBC interview, Cohen was pressed repeatedly on how GameStop would get to $55 billion and repeatedly said he didn’t understand the question.
When Mashable contacted GameStop for clarification, the company responded by posting a link to Cohen’s pinned post on X, in which he wrote, “selling stuff on eBay to pay eBay.” He then posts that his eBay account has reached its monthly listing limit of $50,000 and has been suspended permanently, at which point he announces to X that he is on the phone with customer support. It was, in the words of our reporter, dependent on the spin.
As for what GameStop planned to do with eBay if it actually acquired it, the platform focused on using GameStop’s roughly 1,600 remaining retail locations as virtual hubs for authentication, food, and order fulfillment. In plain words, it means trying to compete with Amazon. The trick eBay had already tried a decade earlier. Part of the company’s recent resurgence has been its return to being an online marketplace for buying collectibles and antiques.
eBay, meanwhile, had not contacted GameStop before receiving the unsolicited offer and indicated that it would review the offer as a viable offer. As of this morning, the board has made its response clear.
