Ryan Cohen’s plan to acquire eBay for $56 billion has rattled GameStop investors, sending GME down more than 10% and prompting one of its most well-known backers to walk away entirely.
Michael Burry, the investor made famous by “The Big Short,” confirmed on his Substack newsletter that he sold his full GME position. His reason was straightforward: the debt required to fund the eBay deal doesn’t fit the Berkshire Hathaway-style investment model he originally backed.
“Wall Street does indeed mistake debt for creativity, and does so constantly,” Burry wrote. “I of all people should have known.”
The proposed deal would see GameStop acquire eBay using a 50/50 mix of cash and stock. The logic, at least on paper, is that combining the two platforms could build a broader e-commerce and collectibles business.
Burry actually acknowledged the strategic idea has some merit. He noted that the collectibles and secondary market opportunity could run into the hundreds of billions. He wrote that he does “support the effort” — but that the execution risk is too high for his comfort.
His bigger concern is the financial structure. He described some of the leverage scenarios as bordering “on distressed,” suggesting the deal would need to go nearly perfectly to justify the strain it puts on the balance sheet.
Burry also expressed doubt the deal goes anywhere, predicting eBay will “reject GameStop’s offer out of hand.” He framed the move as driven more by financial ambition than by genuine business fit.
Baird analyst Colin Sebastian isn’t buying the deal either. He assigns a low probability of success on multiple grounds.
Sebastian’s first issue is that the deal assumes eBay needs to pivot away from its current technology-led marketplace model — a questionable assumption given that eBay has already returned to growth. GMV and revenue are tracking in line with broader e-commerce market trends.
His second concern is about value creation. The deal may look accretive on paper, but Sebastian argues that’s mostly financial engineering rather than real operating synergies. That raises questions about long-term competitiveness, not confidence in it.
He also flags the approval hurdle. Given the strategic mismatch, Sebastian sees little chance eBay’s board accepts the offer. He specifically mentions the possibility of defensive measures, including a poison pill.
Cohen’s pitch is essentially that GameStop’s cash pile can be deployed to build something much bigger than a video game retailer. The eBay proposal fits that vision — combining two platforms with existing traction in collectibles and secondary markets.
But critics argue he may be reaching. The sheer size of the transaction, $56 billion, puts enormous pressure on execution and financing. Even supporters like Burry think the path is narrow.
GameStop has not confirmed any formal offer has been made, and eBay has not publicly responded to the reported proposal.
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