By Andrew Moran

EBay has turned down videogame retailer GameStop’s $55.5 billion takeover proposal.

The online marketplace, in a May 12 letter, called GameStop’s acquisition offer “neither credible nor attractive.”

“The Board, with the support of its independent advisors, has thoroughly reviewed your proposal and has determined to reject it,” Paul Pressler, the chairman of eBay’s board, said in the letter. “We have concluded that your proposal is neither credible nor attractive.”

Last week, GameStop CEO Ryan Cohen offered to purchase the company for $125 per share in a cash-and-stock deal.

A chorus of market watchers questioned the math behind the offer since eBay is larger than GameStop.

EBay’s market cap is more than $48 billion, while GameStop’s is about $10.4 billion.

Cohen noted in his unsolicited bid that the retailer had secured a $20 billion financing commitment from TD Securities and had $9 billion in cash on its balance sheet. GameStop also holds approximately $400 million in Bitcoin.

In an interview with CNBC’s “Squawk Box,” Cohen also suggested GameStop could issue more stock to plug any holes in the purchase.

Pressler acknowledged these discrepancies in the letter as well, pointing to the “uncertainty regarding your financial proposal” and “the leverage, operational risks, and leadership structure of a combined entity.”

But Cohen argues that he sees a path toward reviving eBay and producing cost savings.

He has proposed slashing the company’s $2.5 billion sales and marketing spending and reducing headcount. Additionally, Cohen proposed turning GameStop’s 1,600 U.S. stores into hubs for authentication, order fulfillment, and live shopping experiences.

Cohen, who became head of GameStop in 2023, pushed back against the business news network for its past criticisms of the company.

“Didn’t you guys call for GameStop’s demise multiple times? Like, it should have been bankrupt by now?” he said.

“Look at our financial performance. Is it better than you guys anticipated? Because you guys said it was going to be doing really, really poorly, and it’s actually doing OK.”

If the merger had happened, Cohen would have headed the combined company and been compensated solely based on its performance.

Shares of GameStop fell more than 2 percent in pre-market trading, trimming its year-to-date gain to around 12 percent.

The eBay stock fell by about 1 percent before the opening bell and remains up 24 percent this year.

Wall Street has turned sour on GameStop, which enjoyed the meme-stock frenzy five years ago.

In an aerial view, the eBay logo is displayed on the roof of eBay headquarters on Jan. 24, 2024, in San Jose, Calif.. Justin Sullivan/Getty Images

The stock’s 12-month consensus price target indicates a 41.7 percent downside, according to MarketBeat.

In its latest earnings report, the fourth quarter net sales, operating income, and earnings per share topped expectations.

“The stock has been stuck in a very narrow range between $20 and $25 since last June and looks to break out of this channel. The question is in which direction,” Jay Woods, chief market strategist at Freedom Capital Markets, said in a note emailed to The Epoch Times.

“CEO Ryan Cohen has a very lucrative, incentive-laden contract and needs the valuation to rise in order to satisfy those metrics. So he is quite vested in the share price, and it will be interesting to see what he has up his sleeve.”

EBay, meanwhile, is seen sliding 1.4 percent over the next 12 months. Analysts suggest either “Buy” or “Hold” the stock.

Its first-quarter earnings beat market estimates across revenue and gross merchandise volume.