Why is GameStop's stock crashing again, and what's the fate of its crypto holdings?

GameStop Corp. (NYSE: GME) is falling again because its new plan is not small nor easy to finance. The retailer wants to buy eBay Inc. (NASDAQ: EBAY) in a cash-and-stock deal worth about $56 billion, while GameStop itself is worth less than $12 billion.

That is why traders are not treating this like a clean takeover story. They are treating it like a funding problem with a stock chart attached.

The offer prices eBay at $125 per share. That is above its last close before the bid, and it is far above where eBay traded when GameStop began buying shares on Feb. 4.

But the market still pushed GameStop down 10%. eBay rose about 5% to near $109, which is still well under the bid price. That gap says investors are not convinced this deal will survive.

Michael Burry dumps GameStop after Ryan Cohen makes giant eBay bid without deal in place

Michael Burry, the investor known from The Big Short, sold his full GameStop position after the bid became public. Michael had backed the company around 2019, when the early bull case helped feed the stock’s famous rally. This time, he did not stay around for the next chapter.

Michael told subscribers of his Substack newsletter on Monday:

“I sold my entire GME position. Any which way I sliced it, the Instant Berkshire thesis was never compatible.”

He also said GameStop was the first stock he had sold since starting the newsletter. His issue was debt. A deal this large could force GameStop to borrow heavily, issue stock, or build a financing package that changes the whole story for shareholders.

GameStop announced the bid on Sunday. The proposal is unsolicited and nonbinding, so eBay has not agreed to anything. The offer is split between cash and GameStop common stock. It gives eBay investors a 20% premium to Friday’s $104.07 close and a 46% premium to the Feb. 4 close.

Ryan Cohen, GameStop’s CEO, told CNBC on Monday that he had not started talks with eBay management. He said:

“We are just starting. For obvious reasons, eBay is a public company, there’s all kinds of perverse financial incentives from the board to the management team. So there’s only one way to approach something like this.”

eBay confirmed it received the offer and said its board would review it. TD Bank Group (NYSE: TD) has given GameStop a $20 billion financing letter, but that still leaves a large gap beside the full deal value.

GameStop puts its Bitcoin stash near eBay’s huge buyer network

The crypto angle is where this gets even stranger. GameStop has not said it will plug Bitcoin into eBay payments. Still, the question is now sitting there in plain sight: what happens if a company holding BTC buys a marketplace with 135 million active buyers?

GameStop approved Bitcoin as a treasury reserve asset and bought 4,710 BTC for $513 million in May 2025. It then used that stash as collateral with Coinbase Global Inc. (NASDAQ: COIN) for an options strategy meant to earn yield while keeping exposure to BTC.

Right now, Bitcoin is mostly a balance-sheet asset for GameStop. ETFs helped bring institutions in, but daily spending still faces fees, taxes, and awkward user habits.

eBay brings reach across 190 markets and nearly $80 billion in 2025 gross merchandise volume. Before any crypto payment dream matters, GameStop has to show how it pays for eBay.

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