EBay rejects GameStop’s $56 billion bid as bitcoin exposure back in focus

Shopping giant eBay has rejected video game retailer GameStop’s ambitious $56 billion takeover offer, leaving the latter to decide whether it wants to walk away, raise the bid or take the fight directly to shareholders.

EBay’s board called the half-cash, half-stock offer “neither credible nor attractive” on Tuesday, per Reuters, citing doubts around financing and arguing the company is better positioned under its current management. The rejection was widely expected. EBay has traded well below GameStop’s $125-per-share bid since the offer surfaced, a sign investors were not convinced the deal could close.

That puts GameStop’s bitcoin position back in the conversation, as CoinDesk reported earlier this month.

The cultish firm holds roughly $368 million worth of bitcoin exposure via a covered-call options strategy. It shifted nearly all of its 4,709 BTC to institutional brokerage Coinbase Prime, as a filing showed in March, turning the position into a receivable rather than directly held bitcoin.

GameStop’s offer was built around $9.4 billion of cash and liquid investments, plus up to $20 billion in debt financing from TD Bank. But that financing is contingent on the combined company maintaining an investment-grade rating, and Moody’s has already warned the deal would be credit negative for eBay. Raising the offer or going hostile would likely make the financing math more challenging.

Cohen has previously framed the eBay deal as “way more compelling than bitcoin,” leaving open the question of whether GameStop’s BTC position could be unwound if more cash is needed.

Selling it would not fund the deal by itself, but it is one of the few discretionary assets GameStop can point to as it tries to convince investors the bid is real.

The market remains skeptical, however. EBay shares slipped about 1% to $107 before the bell Tuesday, still far below the offer 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 Short, sold his stake after the bid and warned that buying eBay could saddle GameStop with debt and dilute shareholders.