Shopping giant eBay has rejected an ambitious $56 billion takeover bid from video game retailer GameStop, leaving it to decide whether to give up, raise its bid or go to war with shareholders directly.
eBay’s board of directors on Tuesday called the half-cash, half-stock takeover offer “neither credible nor attractive,” citing concerns about financing and arguing the company is in a better position under current management, Reuters reported. Rejection is widely expected. Since the offer surfaced, eBay has traded well below GameStop’s $125 per share bid, a sign investors don’t believe the deal can be completed.
As CoinDesk reported earlier this month, this brings GameStop’s Bitcoin status back into focus.
The well-respected firm holds approximately $368 million worth of Bitcoin exposure through a covered call strategy. As a March filing revealed, it moved almost all 4,709 Bitcoin to institutional brokerage Coinbase Prime, converting the position into accounts receivable rather than holding Bitcoin directly.
GameStop’s offer includes about $9.4 billion in cash and liquid investments, as well as up to $20 billion in debt financing from TD Bank. But the financing depends on whether the combined company can maintain an investment-grade rating, and Moody’s has warned that the deal will have a negative credit impact on eBay. Raising your offer or taking a hostile stance can make the financing math more challenging.
Cohen has previously described eBay trading as “more attractive than Bitcoin,” leaving open the question of whether GameStop’s BTC position could be unwound if more cash was needed.
Selling it wouldn’t itself fund the deal, 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 remains skeptical. eBay shares fell about 1% to $107 before the close on Tuesday, still well below the offering price, while GameStop fell 4%.
The deal had previously been opposed by some GameStop investors.
Michael Burry, investor, for big shortHe sold his shares after the bid and warned that an eBay acquisition could saddle GameStop with debt and dilute shareholders.
