EBay rejects GameStop’s $56 billion bid, putting bitcoin exposure back in focus
The online marketplace’s board called the half-cash, half-stock offer “neither credible nor attractive” Tuesday.
What to know:
- EBay’s board rejected GameStop’s $56 billion half-cash, half-stock takeover bid as “neither credible nor attractive,” citing financing concerns and confidence in its current strategy.
- The market signaled skepticism that the deal will close, with eBay shares trading well below GameStop’s $125-per-share offer and both stocks slipping after the rejection.
- GameStop’s sizable bitcoin options position and limited discretionary assets, along with warnings from investor Michael Burry about debt and dilution, raise questions about how it would fund a higher or hostile bid.
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.
