EBay Rejects GameStop’s $55 Billion Offer as ‘Neither Credible Nor Attractive’

Global online marketplace eBay has rejected GameStop’s unsolicited, $55.5 billion half-stock, half-cash acquisition proposal, it announced Tuesday.

After a “thorough review,” the board of directors for the marketplace firm concluded the offer from the publicly traded collectibles and gaming company was insufficient. 

“We have concluded that your proposal is neither credible nor attractive,” board chairman Paul Pressler wrote in a letter addressed directly to GameStop CEO Ryan Cohen. 

Pressler cited eBay’s standing as an independent firm and uncertainty regarding the finances of the proposal offering and the leverage and operational risks of a combined entity, among other items, as reasons for its rejection. 

“eBay is a strong, resilient business that has delivered meaningful results over the past several years,” the letter reads. “We have sharpened our strategic focus, strengthened execution, enhanced our marketplace and seller experience, and consistently returned capital to shareholders.” 

Earlier this month, Cohen told the Wall Street Journal that eBay should be worth a lot more as a business, noting that he was envisioning “turning eBay into something worth hundreds of billions of dollars.”

The board at eBay, though, is confident in its path forward. 

“With its differentiated global marketplace and a clear strategy, eBay’s Board is confident that the company, under its current management team, is well-positioned to continue to drive sustainable growth, execute with discipline, and deliver long-term value for our shareholders,” Pressler wrote. 

While GameStop owns around 5% of eBay shares at present time, its takeover attempt valued the firm at a premium to its current market cap—around $47 billion since the opening bell on Tuesday. 

Shares of EBAY are down about 0.4% on the day, recently changing hands at $107.71. EBAY is up nearly 24% year-to-date, and has gained more than 55% in the last year of trading. 

GameStop (GME), on the other hand, is down 0.78% on the day, trading around $22.99. The firm, which trades at just a fraction of the EBAY market cap—just above $10.3 billion in intraday trading—has seen its shares fall more than 18% in the last year of trading. 

“Big Short” investor Michael Burry offloaded his GME shares last week after the firm made its pitch for eBay, citing proposed debt levels that went against his investment thesis.

The firm purchased 4,710 BTC for more than $500 million last year, but recently sent all but 1 BTC to Coinbase as part of a covered-call strategy in an attempt to generate yield. Its holdings are worth nearly $380 million now at Bitcoin’s recent price of $80,571.