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

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.”

“eBay's Board is confident that the company, under its current management team, is well-positioned to continue to drive sustainable growth,” read the letter.

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 sent 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.

The unsolicited bid prompted investor Michael Burry to sell his entire position in GameStop.

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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