Shopping giant eBay has rejected video game retailer GameStop’s ambitious $56 billion takeover bid, leaving the latter to decide whether to walk away, raise its bid or take the fight directly to shareholders.
EBay’s board called the half-cash, half-equity offer “neither credible nor attractive” on Tuesday, according to Reuters, citing doubts about financing and arguing the company is better positioned under its current management. The rejection was widely expected. EBay has traded well below GameStop’s bid of $125 apiece.
That puts GameStop’s bitcoin position back in the conversation, as CoinDesk reported earlier this month.
The cult firm has roughly $368 million worth of bitcoin exposure via a covered call strategy. It moved almost all of its 4,709 BTC to institutional brokerage Coinbase Prime, a filing showed in March, making the position a receivable rather than directly owned bitcoin.
GameStop’s offer was built around $9.4 billion in cash and liquid investments, plus up to $20 billion in debt financing from TD Bank. But that financing is conditional on the combined company maintaining an investment-grade rating, and Moody’s has already warned that the deal would be credit-negative for eBay. Raising the offer or becoming hostile will likely make the financing math more challenging.
Cohen previously framed the eBay deal as “much more compelling than bitcoin,” leaving open the question of whether GameStop’s BTC position could be liquidated if more cash is needed.
Selling it wouldn’t fund the deal by itself, but it’s one of the few discretionary assets GameStop can point to as it tries to convince investors the bid is real.
However, the market is still skeptical. EBay shares fell about 1% to $107 before midnight Tuesday, still well below the asking price, while GameStop fell 4%.
The deal previously drew pushback from parts of GameStop’s own investor base.
Michael Burry, the investor made famous by The Big Shortsold its stake after the bid, warning that buying eBay could saddle GameStop with debt and dilute shareholders.
