GameStop (GME) Stock: What Happens Next After eBay Rejects the Bid

TLDR

• eBay rejected GameStop’s $125-per-share, $56 billion unsolicited takeover bid, calling it “neither credible nor attractive.”
• Morgan Stanley says the takeover fight may not be over — GameStop could raise its offer, launch a proxy fight, or seek new financing.
• Stifel questioned whether shareholders would back the deal, citing the size gap between the two companies and integration risks.
• eBay stock fell 1.3% to $106.68 on Tuesday; GameStop dropped nearly 2% following the rejection news.
• Prediction platform Polymarket puts only a 13% chance that GameStop will successfully acquire eBay.

eBay formally rejected GameStop’s unsolicited $56 billion takeover bid on Tuesday, calling the $125-per-share proposal “neither credible nor attractive.” eBay stock fell 1.3% to $106.68 on the news, while GameStop dropped nearly 2%.

GameStop Corp., GME

The rejection was widely expected on Wall Street. eBay’s market cap is roughly four times that of GameStop, and analysts had already raised doubts about the financing structure of the half-cash, half-stock offer.

eBay Chairman Paul Pressler issued a statement pointing to concerns over financing, long-term growth impact, and the leadership structure of a potential combined company. The board also highlighted its own progress under CEO Jamie Iannone, noting the stock has returned 201% since he took the role six years ago.

GameStop CEO Ryan Cohen had included a $20 billion debt financing commitment from TD Bank in the proposal. However, sources close to eBay believe it is highly unlikely that a combined company would receive the investment-grade credit rating required for that financing to proceed. Moody’s said last week the deal would be credit negative for eBay.

Cohen, who holds a 5% stake in eBay, told CNBC he could boost eBay’s profitability by replicating GameStop’s cost-cutting model and using its 600 U.S. stores as a physical network. He also said he would serve as CEO of the combined company with no salary, bonuses, or golden parachute.

Morgan Stanley: The Fight Isn’t Over

Morgan Stanley said the rejection was not surprising but outlined several paths forward for GameStop. The bank said Cohen could raise the offer price, take the proposal directly to eBay shareholders through a proxy fight, or seek additional financing if needed. The firm also noted that another bidder could now emerge, given eBay is effectively “in play.” However, it added that investor support for the current offer looks weak without a higher premium and more cash on the table.

Stifel Questions Shareholder Support

Stifel also expected the rejection but flagged deeper concerns. The firm questioned whether GameStop shareholders would back a deal of this scale, pointing to the vast difference in company size and major integration risks. Analysts at Stifel were also skeptical of Cohen’s projection of $2 billion in synergies within just 12 months.

Despite those doubts, Stifel expects Cohen to respond to the rejection and said the battle between the two companies is likely to continue.

Some GameStop investors aren’t happy. Michael Burry, known for his role in “The Big Short,” sold his GameStop stake after the bid was announced, warning it would load the company with debt and dilute shareholder value.

Traders on prediction platform Polymarket are pricing in just a 13% chance that GameStop pulls off the acquisition — a number that slipped further after Tuesday’s rejection.

eBay has an EBITDA margin of 31%, roughly three times GameStop’s 10%. In the past 12 months, eBay stock has climbed 56% while GameStop has dropped 18%.

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