In a move that has set the M&A community talking on both sides of the Atlantic, eBay has firmly slammed the door on a $55.5bn (£40.9bn) unsolicited takeover approach from American video games retailer GameStop, branding the bid “neither credible nor attractive”.
The rejection, communicated in a sharply worded letter from eBay’s board to GameStop chief executive Ryan Cohen, will come as little surprise to anyone with a passing acquaintance of the relative scale of the two businesses. GameStop, the bricks-and-mortar gaming chain that found cult status in 2021 as the original “meme stock”, is roughly a quarter of the size of the online auction house it is attempting to swallow, a David-and-Goliath dynamic that City analysts have long viewed as a near-insurmountable hurdle.
In its rebuff, the eBay board cited “uncertainty” over how the deal would be financed, alongside concerns about “the impact of your proposal on eBay’s long-term growth and profitability”. Directors also pointed to “operational risks, and leadership structure of a combined entity”, as well as questions over “GameStop’s governance”, a pointed reference, observers will note, to a company whose share price has historically been driven as much by social media sentiment as by retail fundamentals.
GameStop had attempted to bolster the credibility of its overture with a commitment letter from TD Securities for roughly $20bn of debt financing. Yet that prospective debt pile is precisely what gave eBay’s board, and a chorus of independent analysts, pause for thought. Sucharita Kodali, retail analyst at Forrester, told Business Matters the proposition was hardly “a terribly good offer”, warning that it would saddle the auction giant with GameStop’s borrowings at a moment when eBay is finally finding its feet again.
That recovery is no idle boast. Despite the well-documented competitive squeeze from Amazon, Etsy and, more recently, the Chinese disruptor Temu, eBay posted net profits of $418.4m in 2025, more than treble the $131.3m delivered the year before, even as sales softened. The board insists its turnaround strategy is bearing fruit and is in no mood to surrender the upside to an opportunistic suitor.
Mr Cohen, however, is unlikely to retreat quietly. The GameStop chief, who built his fortune through online pet retailer Chewy before becoming the unofficial figurehead of the meme-stock movement, claimed last week that eBay could be transformed under his stewardship into a credible challenger to Amazon. He has also signalled his willingness to bypass the boardroom and take his proposition directly to eBay’s shareholders, a hostile gambit that would set the stage for one of the more colourful takeover battles of the year.
For Britain’s SME owners watching from across the Atlantic, the saga is more than a transatlantic curiosity. eBay remains a vital sales channel for thousands of small British retailers, many of whom built post-pandemic businesses on its platform. Any prolonged ownership dispute, or a deal that materially loaded the company with debt, could have tangible consequences for the fees, listing policies and seller protections those firms depend on.
For now, eBay’s chairman and chief executive will be hoping the matter ends here. The bookies, and most of Wall Street, are betting it won’t.
