GameStop's $55B Play for eBay Is Not Happening

EBay has swiped left on GameStop's surprise courtship. The online marketplace on Tuesday rejected a roughly $55 billion cash-and-stock offer from the much smaller video game retailer, dismissing the bid as "neither credible nor attractive," reports the New York Times. In a terse letter to GameStop made public Tuesday, eBay chairman Paul Pressler cited doubts about how the proposal would be financed and warned it would saddle the combined company with heavy debt:

• "We have taken into account such factors as 1) eBay's standalone prospects, 2) the uncertainty regarding your financing proposal, 3) the impact of your proposal on eBay's long-term growth and profitability, 4) the leverage, operational risks, and leadership structure of a combined entity, 5) the resulting implications of these factors on valuation, and 6) GameStop's governance and executive incentives."

GameStop CEO Ryan Cohen could respond with a hostile takeover, notes CNBC, having signaled last week that he was willing to take his bid directly to eBay stockholders. The rejection followed days of head-scratching on Wall Street over how GameStop—about a quarter of eBay's size—could pull off such a deal. Michael Burry, he of The Big Short fame who once likened Cohen to Warren Buffett, dumped all his GameStop shares, calling the deal "pedestrian."