Video game retailer GameStop saw its share price drop 3.4% on Tuesday, 12 May, hitting an intraday low of $22.39 on the NYSE after eBay rejected a $56 billion takeover offer from the company.
The e-commerce company said its board had unanimously rejected the proposal, citing concerns over financing uncertainty and operational risks associated with combining the two businesses.
eBay’s board turned down the offer after considering the “uncertainty” surrounding the financing plan, the operational risks involved, and GameStop’s governance structure, Chairman Paul Pressler said in a letter addressed to Ryan Cohen.
Pressler also cited GameStop’s executive incentives and the potential impact of the takeover on eBay’s long-term growth prospects. The rejection leaves Cohen with the option of pursuing a proxy fight to replace eBay board members, a move that could take more than a year.
GameStop CEO Ryan Cohen said that he is willing to pursue a proxy fight and take the offer directly to eBay shareholders if the board continues to reject the proposal.
GameStop last week offered to acquire eBay at $125 per share, consisting of 50% cash and 50% GameStop stock, despite eBay having a market value nearly four times larger than GameStop’s based on Friday’s closing price.
The unprecedented takeover bid for the much larger eBay drew scepticism from investors and analysts, especially after GameStop reportedly said it plans to borrow $20 billion to help finance the acquisition.
Cohen, in his letter to eBay, promised to deliver $2 billion in annualised cost reductions within 12 months of closing the deal. He specifically targeted the e-commerce giant’s sales and marketing budget, noting that the heavy spending resulted in a net increase of fewer than one million active buyers in fiscal 2025.
Although both eBay and GameStop sell collectables such as trading cards, their core business models differ significantly. While eBay earns commissions by connecting buyers and sellers online without holding inventory, GameStop operates as a traditional retailer that purchases goods wholesale and resells them through physical stores.
GameStop currently operates around 2,200 retail stores across the US, France, and Australia after shutting 227 locations last year. The retailer generated $3.6 billion in revenue during the 12 months ended 31 January, primarily from the sale of gaming hardware and collectibles, Bloomberg reported.
Meanwhile, eBay’s online marketplace has around 136 million users who spend roughly $80 billion annually on the platform. The company reported 2025 revenue of $11.6 billion, primarily from commissions, while also generating income from advertising and payment processing services, the report added.
Stock continues to witness sharp swings
GameStop shares have struggled to gain momentum over the last three months, largely remaining stagnant.
Over the years, the stock has not displayed any sustained pattern of either winning or losing momentum, as it has remained highly volatile, rallying sharply in some months, only to surrender those gains in the following months, and then reversing losses again. This cycle has continued almost consistently since 2021.
In terms of yearly performance, the stock delivered a massive 78% return in 2024. However, the following year, it erased nearly half those gains after plunging 36%. So far this year, the stock has rebounded by 14%.
(With inputs from Bloomberg)
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