EBay Rejects GameStop's $55 Billion Offer as 'Neither Credible Nor Attractive'

Global online marketplace eBay has rejected GameStop’s unsolicited, $55.5 cardinal half-stock, half-cash acquisition proposal, it announced Tuesday.

After a “thorough review,” the committee of directors for the marketplace steadfast concluded the connection from the publically traded collectibles and gaming institution was insufficient. 

“We person concluded that your connection is neither credible nor attractive,” committee president Paul Pressler wrote successful a missive addressed straight to GameStop CEO Ryan Cohen. 

Pressler cited eBay’s lasting arsenic an autarkic steadfast and uncertainty regarding the finances of the connection offering and the leverage and operational risks of a combined entity, among different items, arsenic reasons for its rejection. 

“eBay is simply a strong, resilient concern that has delivered meaningful results implicit the past respective years,” the missive reads. “We person sharpened our strategical focus, strengthened execution, enhanced our marketplace and seller experience, and consistently returned superior to shareholders.” 

Earlier this month, Cohen told the Wall Street Journal that eBay should beryllium worthy a batch much arsenic a business, noting that helium was envisioning “turning eBay into thing worthy hundreds of billions of dollars."

The committee astatine eBay, though, is assured successful its way forward. 

“With its differentiated planetary marketplace and a wide strategy, eBay's Board is assured that the company, nether its existent absorption team, is well-positioned to proceed to thrust sustainable growth, execute with discipline, and present semipermanent worth for our shareholders,” Pressler wrote. 

While GameStop owns astir 5% of eBay shares astatine contiguous time, its takeover effort valued the steadfast astatine a premium to its existent marketplace cap—around $47 cardinal since the opening doorbell connected Tuesday. 

Shares of EBAY are down astir 0.4% connected the day, precocious changing hands astatine $107.71. EBAY is up astir 24% year-to-date, and has gained much than 55% successful the past twelvemonth of trading. 

GameStop (GME), connected the different hand, is down 0.78% connected the day, trading astir $22.99. The firm, which trades astatine conscionable a fraction of the EBAY marketplace cap—just supra $10.3 cardinal successful intraday trading—has seen its shares autumn much than 18% successful the past twelvemonth of trading. 

“Big Short” capitalist Michael Burry offloaded his GME shares past week aft the steadfast made its transportation for eBay, citing projected indebtedness levels that went against his concern thesis.

The steadfast purchased 4,710 BTC for much than $500 cardinal past year, but precocious sent each but 1 BTC to Coinbase arsenic portion of a covered-call strategy successful an effort to make yield. Its holdings are worthy astir $380 cardinal present astatine Bitcoin's caller terms of $80,571.