eBay Shoots Down GameStop’s $56B Takeover Pitch

USA Today, CNBC, CNN, Business Insider, and Bloomberg contributed to this report.

eBay has officially told GameStop to take a step back.

On Tuesday, the online marketplace rejected GameStop CEO Ryan Cohen’s $56 billion buyout offer, calling it “neither credible nor attractive” and making clear it thinks the company is better off flying solo.

The board’s message was blunt. It said the deal raises too many questions – especially around financing, debt, long-term growth and who would actually be running the combined company. In eBay’s view, the answer to all of that is simple: not them.

GameStop’s pitch had already raised eyebrows across Wall Street. The video game retailer is much smaller than eBay, and even after Cohen said he had lined up a $20 billion financing commitment from TD Securities, the math still looked shaky. He also leaned hard on the idea that the rest could come from stock and GameStop’s cash pile.

That explanation did not exactly settle anyone down.

Analysts have been skeptical from the start, and eBay’s rejection only made the deal look more far-fetched. eBay said its own turnaround is working, pointing to years of improved execution and a stock that has more than doubled under CEO Jamie Iannone.

Cohen, though, is not backing off. He’s argued that GameStop could slash costs, trim eBay’s marketing spend and turn the company’s 1,600 US stores into a physical network for authentication, fulfillment and live shopping. In his version of the future, the merger would make eBay a stronger challenger to Amazon.

eBay clearly isn’t buying that vision.

The company said its current management team has already sharpened strategy, improved the marketplace and kept returning capital to shareholders. It also said it is confident it can keep driving growth on its own.

The market seemed to side with eBay. GameStop shares slipped after the rejection, while eBay held up better, even though the stock was still trading well below Cohen’s offer price.

Cohen has hinted he may try to take the fight directly to eBay shareholders, but that would be a heavy lift. He’d need a much bigger stake to force a special meeting, and even then, the financing doubts would still hang over the whole thing.

For now, eBay’s answer is no. And it does not sound like the board expects to change its mind anytime soon.