Following the eBay board's formal rejection of a $56 billion acquisition offer, GameStop has further increased its stake in the e-commerce giant. Its shareholding has risen from approximately 5% to 6.55%, signaling that CEO Ryan Cohen is not retreating despite the rebuff. This "snake swallowing an elephant" style takeover battle continues to intensify.

In early May, GameStop submitted a non-binding proposal to acquire all outstanding shares of eBay for $125 per share. The offer comprised 50% cash and 50% GameStop stock, valuing the deal at approximately $55.5 billion. This price represented a 46% premium to eBay's share price on February 4th, when GameStop began accumulating its position. At that time, GameStop already held an economic interest of about 5% in eBay through derivatives and common stock.

In the proposal, Cohen outlined an ambitious vision to integrate physical and e-commerce operations. GameStop's roughly 1,600 US stores could be transformed into authentication centers and logistics hubs for eBay collectibles. The company also pledged to achieve $2 billion in cost savings within 12 months of the deal's completion.

However, the eBay board formally rejected the offer on May 12th. Chairman Paul Pressler stated in a response letter that the proposal was "neither credible nor attractive," citing concerns over financing uncertainty, operational risks, and GameStop's corporate governance. The market has been largely skeptical of the deal. With a market capitalization of only about $10 billion—less than a quarter of eBay's—GameStop's ability to finance the acquisition, which includes plans to raise $20 billion in debt, is heavily questioned.

In the face of the rejection, Cohen has indicated he may bypass the board and take the offer directly to shareholders through a proxy fight. The recent stake increase to 6.55% is widely viewed as an escalation of his pressure tactics, potentially paving the way for a special shareholder meeting or a push for board seats more supportive of a deal. As of the end of May, eBay's stock has risen approximately 35% year-to-date, while GameStop's shares have gained about 9%.