Online marketplace eBay has rejected an offer from GameStop to buy the company for $55.5 billion, dealing a blow to the video game retailer’s ambitions to create a rival to Amazon.
After reviewing GameStop’s proposition, the eBay board had concluded that the proposal was “neither credible nor attractive,” eBay board chairman Paul Pressler wrote in a letter to GameStop CEO Ryan Cohen Tuesday. In the letter, which was shared with CNN, Pressler said the board had taken the decision after considering eBay’s “standalone prospects,” the “uncertainty” regarding how the deal would be funded and GameStop’s “governance and executive incentives,” among other factors.
CNN has reached out to GameStop for comment. The company’s shares fell 4.5% in premarket trading.
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GameStop’s ambitious bid for a company nearly four times its size had already raised several eyebrows, particularly as details on how Cohen planned to pay for the offer remained vague and he seemed to skirt the issue in an interview with CNBC.
In a bizarre twist, it then emerged that Cohen was selling goods on eBay – to fund the purchase of eBay. Among the merchandise on offer: a GameStop cap for $4,950 and a similarly branded mug going for $3,151.
GameStop’s outlandish proposal comes amid something of a revival at eBay, which has pushed to reinvent itself in the face of rising competition from the likes of Walmart, Amazon, Shein and Facebook Marketplace. The company’s share price has gained 24% this year.
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Pressler said that eBay, under its current management team, was “well-positioned to continue to drive sustainable growth… and deliver long-term value for our shareholders.”
“eBay is a strong, resilient business that has delivered meaningful results over the past several years,” he noted. “We have sharpened our strategic focus, strengthened execution, enhanced our marketplace and seller experience, and consistently returned capital to shareholders.”
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