The company announced Tuesday (May 12) that its board had reviewed the surprise takeover bid and decided to reject it. The announcement included the text of a letter the board had sent to GameStop CEO Ryan Cohen.
“We have concluded that your proposal is neither credible nor attractive,” the letter says, citing factors like eBay’s “standalone prospects” and “uncertainty” on how the deal would be financed.
The company also pointed to the impact of the bid on its long-term profitability and growth, “leverage, operational risks, and leadership structure of a combined entity,” and the effect of those factors on valuation, and “GameStop’s governance and executive incentives.”
PYMNTS has contacted GameStop for comment but has not yet gotten a reply. The video game retailer announced earlier this month it had put forth a nonbinding proposal to acquire 100% of eBay, with Cohen serving as CEO of the new combined company.
In its letter to eBay, GameStop noted that the eCommerce firm had spent $2.4 billion on sales and marketing during fiscal year 2025 while adding 1 million net active buyers.
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“More spend is not producing more users on a marketplace with near-universal brand recognition,” the company said, saying it would slash around $1.2 billion in sales and marketing costs, part of $2 billion in yearly cost reductions within 12 months of closing.
Cohen had told the Wall Street Journal (WSJ) earlier this year that he was weighing deal targets, especially in the consumer and retail space, as part of an effort to take GameStop beyond video games and collectibles.
The company’s board in January had approved a performance-based stock option award for Cohen, designed to incentivize the CEO to reach a $100 billion market cap, with the award structured so that the incentives “are directly aligned with creating long-term value for GameStop’s stockholders.”
GameStop’s acquisition offer took many observers by surprise, as eBay’s market capitalization is more than four times the size of the gaming company. Many analysts questioned how GameStop would fund the deal.
As WSJ noted in a report Tuesday, Cohen gave an interview with CNBC last week that “left many on Wall Street confused,” with the CEO declining to detail how the acquisition would be financed, despite repeated questions.
“It’s on our website. It’s half cash, half stock,” he said. The reply went viral online, the WSJ report added, and was used in a series of memes.
