GameStop Shares Decline 3% Following eBay Rejection of $56 Billion Acquisition Offer

GameStop's $56 Billion Takeover Bid Rejected by eBay

Tuesday, 12 May, marked a significant day for GameStop as its share price dropped 3.4%, hitting an intraday low of $22.39 on the NYSE. The decline followed eBay's rejection of a $56 billion takeover offer from the video game retailer.

eBay's board unanimously rejected the proposal, citing concerns over financing uncertainty and operational risks associated with combining the two businesses. The e-commerce company's Chairman, Paul Pressler, highlighted the uncertainty surrounding the financing plan, operational risks, and GameStop's governance structure in a letter addressed to Ryan Cohen, GameStop's CEO.

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 has stated 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.

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GameStop last week offered to acquire eBay at $125 per share, consisting of 50% cash and 50% GameStop stock. The offer drew scepticism from investors and analysts, especially after GameStop reportedly said it plans to borrow $20 billion to help finance the acquisition.

Comparison of eBay and GameStop's Market Value

GameStop's core business model differs significantly from eBay's, as the former operates as a traditional retailer that purchases goods wholesale and resells them through physical stores. In contrast, eBay earns commissions by connecting buyers and sellers online without holding inventory.

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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.

In comparison, 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.

GameStop shares have struggled to gain momentum over the last three months, largely remaining stagnant. 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.

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%.