eBay has rejected GameStop’s unsolicited $56 billion takeover bid, calling it “neither credible nor attractive,” according to a letter from eBay chairman Paul Pressler seen by Bloomberg. That reaction may set in motion an attempt by GameStop to take the offer directly to eBay’s shareholders or replace eBay’s board with one favorable to its offer via proxy fight. 

Last week, Gamestop offered $125 a share to purchase eBay, despite having a market value less than a quarter of eBay ($11 billion compared to $45 billion). The bid, consisting of half cash and half GameStop stock, represents a 20 percent premium over eBay’s current stock price. GameStop plans to borrow $20 billion to help finance the acquisition but, when asked, CEO Ryan Cohen couldn’t explain in detail where it would raise the additional capital required. 

eBay said that it reviewed the offer thoroughly and expressed concerns about financing and debt related to the deal. In his letter, Pressler said that eBay was in a strong position, having executed a turnaround to better compete with rivals like Amazon and “consistently returning capital to shareholders.” 

GameStop CEO Ryan Cohen could receive $35 billion in stock if he meets certain criteria, including increasing GameStop’s market value to $100 billion, according to a report last week from The Wall Street Journal. Acquiring eBay could also be a part of Cohen’s plans to evolve GameStop beyond its reputation as a video games and collectibles retailer.

GameStop was one of the original “meme stocks” and became infamous for a short squeeze that caused the value of its stock to soar and fluctuate wildly in early 2021. The company’ recently pivoted from NFTs to retro gaming, covering classic systems from NES to PS Vita. However, it shut down more than 400 US stores earlier this year in an effort to cut costs and boost its market cap. 

eBay, meanwhile, boasts 136 million users who spend $80 billion a year on the platform. Last year, the online marketplace took in $11.6 billion in revenue from commissions, advertising and money processing payments.