GameStop shares fell sharply after Michael Burry exited his entire GME position, turning the retailer’s surprise eBay takeover bid into a new pressure point for the meme-stock favorite.
GME closed Monday at $23.84, down 10.14%, and slipped further after hours to about $23.55. The selloff followed GameStop’s non-binding proposal to acquire eBay for $125 per share in a cash-and-stock deal valued at roughly $55.5 billion.
Burry had returned to GameStop earlier in the year with a balance-sheet-heavy thesis, buying into the stock near tangible book value and treating the company as a possible capital-allocation story. Cohen’s eBay bid changed that equation. In a Substack note, Burry warned that he might not keep the position intact after the acquisition push, then moved out of the stake as the market questioned the deal’s financing and strategic logic.
GameStop’s offer would split consideration evenly between cash and GME stock, with full shareholder election rights and pro-rata allocation. The proposed price represents a 27% premium to eBay’s 30-day VWAP and a 36% premium to its 90-day VWAP.
The headline price is ambitious because GameStop is trying to buy a company far larger than itself. The retailer also disclosed that it has built a roughly 5% position in eBay and sees room for $2 billion in annualized cost reductions within 12 months of closing.
Cohen would lead the combined company under the proposal, giving the deal a clear personality around GameStop’s post-meme-stock transformation. The market’s reaction, however, shows the tension between bold strategy and balance-sheet reality. A takeover of this size could require major debt, heavy stock issuance, or both, which would raise dilution and leverage concerns for existing GameStop holders.
Burry’s departure matters because his GameStop position gave the stock a new institutional-quality narrative beyond the usual retail-trader enthusiasm. His earlier thesis fit a cleaner capital-allocation path: a company with cash, reduced operating risk, and optionality under Cohen’s leadership.
The eBay bid pushes GameStop into a different story. Instead of a leaner balance-sheet play, investors now have to evaluate execution risk across e-commerce integration, financing, shareholder approval, and whether eBay’s board or shareholders would accept the proposal.
That shift also explains why the stock sold off even as the bid created excitement around Cohen’s ambition. GameStop had already rallied on takeover speculation, with GME jumping on the initial eBay bid report. The follow-through looked very different once the full size of the offer, Burry’s exit, and the financing questions hit the same tape.
The drop leaves GameStop with a sharper market test than a normal takeover headline. GME holders are now pricing a company that wants to use its meme-stock balance sheet
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