GameStop CEO Ryan Cohen’s dream of taking on Amazon by buying eBay is officially dead, at least for now.
The online marketplace said Tuesday that it has rejected the brick-and-mortar video game retailer’s unsolicited bid to take over the company.
“We have concluded that your proposal is neither credible nor attractive,” eBay Chairman Paul Pressler wrote in a letter to Cohen.
Pressler said eBay’s board made its decision after a thorough review of GameStop’s proposal. He listed several reasons for the rejection, including eBay’s standalone prospects, the uncertainty around GameStop’s financing, and the impact the deal could have on eBay’s long-term growth and profitability.
The rejection comes a little over a week after GameStop made its bid to buy eBay for $125 per share in a deal worth roughly $56 billion, split between cash and GameStop stock.
Cohen told The Wall Street Journal at the time that together the two companies “could be a legit competitor to Amazon.”
A major part of the pitch focused on the overlap between the two companies in categories like trading cards, retro video games, and collectibles. Cohen proposed using GameStop’s roughly 1,600 U.S. stores as a network of authentication and fulfillment sites, as well as broadcasting studios for live commerce. He also said the company could slash $2 billion in annualized costs within the first 12 months after the deal closed by reducing spending on marketing, product development, and corporate overhead.
Still, many Wall Street analysts were immediately skeptical about how GameStop would come up with the money.
At the time, GameStop had only secured a commitment letter from TD Bank for up to $20 billion in debt financing to help support the takeover effort.
Michael Burry, a former fan of GameStop and the investor portrayed by Christian Bale in The Big Short, disclosed last week that he had sold all of his GameStop shares.
“Never confuse debt for creativity,” Burry wrote in a post on Substack.
Cohen appeared to address some of those criticisms last Wednesday by posting on X that he was selling items on eBay “to pay for eBay.” Later that same day, Cohen posted that his eBay account had been suspended.
But despite the rejection, it’s not yet clear if Cohen will continue pursuing a deal.
Cohen previously told The Wall Street Journal that if eBay rejected the offer, he was prepared to take the proposal directly to eBay shareholders and launch a proxy fight.
GameStop did not immediately respond to a request for comment from Gizmodo.
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