By Ines Ferre

What happened: GameStop (GME) stock fell 4% in premarket trading on Tuesday.

What’s behind the move: Online marketplace eBay (EBAY) rejected the video game retailer’s unsolicited $56 billion bid. In a letter to GameStop’s chairman and CEO Ryan Cohen, eBay’s chairman of the board of directors wrote, “The Board, with the support of its independent advisors, has thoroughly reviewed your proposal and has determined to reject it.”

“We have concluded that your proposal is neither credible nor attractive,” the letter said.

eBay’s board said it considered several factors, including “the uncertainty regarding your financing proposal” and “the impact of your proposal on eBay’s long-term growth and profitability.”

What else you need to know: GameStop’s Cohen offered $56 billion in cash and stock earlier this month for the storied online marketplace, saying he wanted the combined company to compete with Amazon (AMZN).

Questions over how GameStop would pay for the deal immediately surfaced, sending shares of GameStop lower.

Investors speculated that the company would need to take on debt and dilute shares by selling stock to raise the funds.

At the time of the bid, GameStop was roughly a fourth the size of eBay, with roughly $9 billion of cash on its balance sheet. The company said it had a “highly-confident letter” from TD Bank for $20 billion in debt financing.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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