In a move that has got the M&A community talking on both sides of the Atlantic, eBay has slammed the door on an unsolicited $55.5bn (£40.9bn) takeover of US video game retailer GameStop, branding the bid “unbelievable and unattractive”.
The rejection, outlined in a strongly worded letter from eBay’s board to GameStop CEO Ryan Cohen, will come as no surprise to anyone with a passing knowledge of the relative size of the two businesses. GameStop, the brick-and-mortar gaming chain that achieved cult status in 2021 as the original “meme stock,” is about a quarter the size of the online auction house it’s trying to swallow, a David and Goliath series that City analysts have long viewed as an almost insurmountable obstacle.
In its opposition, eBay’s board cited “uncertainty” about how the deal would be funded, as well as concerns about “the impact of your proposal on eBay’s long-term growth and profitability”. Directors also pointed to “operating risks, and the leadership structure of the combined business”, as well as questions about “GameStop’s management”, which is a direct reference, observers will note, to a company whose share price has historically been driven more by social media sentiment and sales fundamentals.
GameStop tried to bolster its bankruptcy credibility with a letter of commitment from TD Securities for nearly $20 billion in debt financing. Yet that debt pile is exactly what gave eBay’s board, and a chorus of independent analysts, pause for thought. Sucharita Kodali, a retail analyst at Forrester, told Business Matters that the proposal was “not a very good offer”, warning that it would lend the auction giant GameStop a loan at a time when eBay is about to acquire it again.
That recovery is no idle boast. Despite well-documented competition from Amazon, Etsy and, more recently, Chinese disruptor Temu, eBay posted a profit of $418.4 million in 2025, more than triple the $131.3m it brought in the year before, even if sales have softened. The board insists its turnaround strategy is bearing fruit and is in no position to compromise on an opportunistic suitor.
Mr Cohen, however, is unlikely to back down. The boss of GameStop, who made his fortune with online pet retailer Chewy before becoming an outlaw of the meme-stock movement, said last week that eBay could be transformed under his management into a credible challenger to Amazon. He also signaled his willingness to skip the boardroom and take his proposal directly to eBay shareholders, a bold gamble that could set the stage for one of the year’s most colorful takeover battles.
For British SME owners looking across the Atlantic, the saga is more than a transatlantic curiosity. eBay remains an important sales channel for thousands of small British sellers, many of whom are building post-pandemic businesses on their own. Any protracted ownership dispute, or agreement that burdens a company with debt, can have significant effects on the payments, listing policies and seller protections that those companies depend on.
For now, eBay’s chairman and CEO will be hoping the matter ends here. Bookmakers, along with much of Wall Street, are betting it won’t.
