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eBay said no. Hard no.
The e-commerce giant’s board tossed out GameStop’s $56 billion takeover proposal this week, calling it “neither credible nor attractive” in a statement that left little room for interpretation. Ryan Cohen, GameStop’s CEO, had put forward a $125-per-share offer mixing cash and stock, but eBay’s directors didn’t buy the numbers. The financing looked shaky. The strategic logic seemed thin. And the whole thing reeked of overreach from a company whose market cap sits way below eBay’s valuation.
Cohen isn’t backing down, though. He’s weighing a direct appeal to eBay shareholders through a special meeting, bypassing the board entirely if they won’t come to the negotiating table. That sets up a potential hostile takeover fight that could drag on for months, pulling in retail traders, institutional investors, and probably a fresh wave of memes. GameStop shares already jumped on the news, fueled by speculation that Cohen might liquidate the company’s 4,710 Bitcoin stash to fund the deal. Those coins, now sitting at Coinbase Prime after a recent transfer, represent a big chunk of GameStop’s $8.8 billion reserve built up through equity raises and convertible bond sales over the past year.
Debt Commitment Hangs on Credit Rating
The financing plan relies on a $20 billion debt commitment from TD Bank. Sounds big. But there’s a catch.
That commitment only kicks in if the merged company keeps an investment-grade credit rating after the deal closes. Moody’s already flagged concerns, saying the merger would probably hurt eBay’s credit standing because of the added leverage. eBay’s board jumped on that point, noting the operational risks of combining two companies with pretty much zero synergies. GameStop sells video games and collectibles, mostly through physical retail and a growing e-commerce arm. eBay runs a massive online marketplace for everything from vintage sneakers to car parts. The overlap? Not really there.
eBay also pointed to shareholder dilution. Cohen’s offer leans heavily on equity, which means current eBay shareholders would see their stakes watered down in a combined entity that might not deliver the growth Cohen’s promising. The board didn’t mince words about that risk, calling it a major factor in their rejection.
From Bitcoin Treasury to Consumer Acquisitions
Cohen’s pivot away from crypto caught people off guard.
Last summer, GameStop bought 4,710 BTC as part of a broader treasury strategy, joining companies like MicroStrategy in betting on Bitcoin as a long-term store of value. That move got cheers from crypto bulls who saw GameStop as a retail brand embracing digital assets. But Cohen’s eBay bid signals a shift. He apparently sees more upside in consumer-focused acquisitions than in holding Bitcoin through market cycles.
The transfer of GameStop’s BTC to Coinbase Prime fueled rumors that a sale is coming. Coinbase Prime caters to institutional clients looking to execute large trades with minimal market impact, which fits the profile of a company preparing to liquidate a significant position. Retail traders on Reddit and Twitter started connecting the dots, pushing GameStop shares higher on speculation that Cohen would use the Bitcoin proceeds to sweeten the eBay offer or fund a tender offer directly to shareholders.
GameStop built that $8.8 billion reserve through a series of equity raises that diluted existing shareholders but left the company flush with cash. The Bitcoin purchase represented about 10% of that reserve at the time, though the value has fluctuated with BTC’s price swings. Selling now would lock in gains or losses depending on GameStop’s average purchase price, which the company hasn’t disclosed in detail.
Cohen’s willingness to dump the Bitcoin stash marks a clear break from the crypto-friendly image GameStop cultivated. It also raises questions about whether other companies holding BTC as a treasury asset might follow suit if they see better opportunities elsewhere. The move could pressure Bitcoin prices if GameStop executes a large sale, though the impact would depend on how Coinbase structures the trade.
What Happens Next
Cohen has options. None of them easy.
He can walk away, which seems unlikely given the public nature of the bid. He can try to negotiate with eBay’s board, though their rejection letter didn’t leave much wiggle room. Or he can take the fight directly to eBay shareholders, forcing a vote on a deal the board already dismissed. That last option would turn this into a full-blown hostile takeover, complete with proxy battles, shareholder letters, and probably some ugly public back-and-forth.
eBay shareholders would have to weigh Cohen’s promises against the board’s warnings about credit downgrades and operational risks. Institutional investors typically side with boards in these situations unless the offer is clearly compelling, which this one isn’t based on the financing concerns. But retail investors, who’ve shown a knack for rallying around GameStop in the past, might push for a vote just to see what happens.
The Bitcoin angle adds another wrinkle. If Cohen sells GameStop’s BTC holdings and uses the proceeds to fund a tender offer, he’d be betting that eBay shareholders value cash in hand over the board’s strategic objections. That could work if the offer price is high enough, but $125 per share might not cut it given eBay’s current trading range and the uncertainty around the merged company’s prospects.
Moody’s concerns about credit ratings aren’t trivial. A downgrade would raise borrowing costs for the combined entity, eating into any synergies Cohen thinks he can extract. eBay’s board made that point repeatedly in their rejection, noting that the deal would saddle the company with debt at a time when interest rates remain elevated and economic uncertainty persists.
Cohen’s track record at GameStop has been mixed. He successfully raised billions in capital and kept the company afloat during a tough stretch for physical retail. But GameStop’s core business hasn’t shown the kind of growth that would justify a massive acquisition like eBay. The company’s pivot to e-commerce and digital sales helped, but it’s still a far cry from the transformation Cohen promised when he first took control.
The retail trading community that powered GameStop’s meme stock surge in 2021 is watching closely. Some see Cohen’s eBay bid as a bold move that could unlock value. Others think it’s a distraction from fixing GameStop’s underlying business challenges. Either way, the Bitcoin sale rumors have already sparked a mini-rally in GME shares, proving that Cohen still knows how to generate buzz.
eBay hasn’t commented beyond the initial rejection. That silence probably reflects a wait-and-see approach as they gauge whether Cohen will actually follow through with a hostile bid. If he does, eBay will need to mount a defense, which could include finding a white knight bidder, implementing a poison pill, or simply making the case to shareholders that the deal doesn’t make sense.
TD Bank’s $20 billion commitment remains the biggest question mark. The conditional nature of that financing gives eBay plenty of ammunition to argue the deal isn’t real. Without a clear path to funding, Cohen’s bid looks more like a negotiating tactic than a serious acquisition attempt. But if he can line up additional financing or prove that the merged company would keep its investment-grade rating, the dynamics shift.
The coming weeks will show whether Cohen’s serious about taking this hostile or if he’s using the public bid to pressure eBay into some other deal. GameStop’s Bitcoin holdings, now sitting at Coinbase Prime, remain the wild card that could fund a tender offer or simply get sold to shore up GameStop’s balance sheet for other purposes. No one’s saying yet.
Frequently Asked Questions
Why did eBay reject GameStop’s takeover offer?
eBay’s board called the $56 billion bid “neither credible nor attractive,” citing financing uncertainty, limited synergies between the companies, and concerns about shareholder dilution from the equity-heavy structure.
What happens to GameStop’s Bitcoin holdings?
GameStop moved its 4,710 BTC to Coinbase Prime, sparking speculation that Cohen plans to sell the holdings to fund the eBay bid or a direct tender offer to shareholders.
