15 days ago, I said:

>If I had RC's ear, I'd recommend him to at least use something like a Collar to secure these gains, if not get out of the position completely. Big picture, the market is in trouble. I expect pretty much everything to keel over starting in about two to three weeks, after this dead cat bounce is over.

>Because if eBay falls with the rest of tech, GME itself will go down by half as much as what eBay goes down by, given we're half GME-the-operating-business, half eBay now.

eBay is playing out exactly as expected:

https://preview.redd.it/uph9jaxd7njh1.png?width=1204&format=png&auto=webp&s=4a60c4df2a1b138f6a05cc886c02131754279973

It's forming a mini bear flag right now, and there is no support from the volume-price profile. Could flush right down to $90 in quick order.

This is bad news for us, as every $1 lower translates to $43M in losses for GME.

RC... get that Collar.

15 days ago, I said:

>If I had RC's ear, I'd recommend him to at least use something like a Collar to secure these gains, if not get out of the position completely. Big picture, the market is in trouble. I expect pretty much everything to keel over starting in about two to three weeks, after this dead cat bounce is over.

>Because if eBay falls with the rest of tech, GME itself will go down by half as much as what eBay goes down by, given we're half GME-the-operating-business, half eBay now.

eBay is playing out exactly as expected:

https://preview.redd.it/uph9jaxd7njh1.png?width=1204&format=png&auto=webp&s=4a60c4df2a1b138f6a05cc886c02131754279973

It's forming a mini bear flag right now, and there is no support from the volume-price profile. Could flush right down to $90 in quick order.

This is bad news for us, as every $1 lower translates to $43M in losses for GME.

RC... get that Collar.

Note: This is my assessment and opinion. I place high probability on this coming to pass, but there's always a chance that it does not.

While Strategy management is running around like a headless chicken and changing strategies like one changes underwear, I believe $MSTR is lining up for another leg down.

Simply because Strategy's fortunes are tied to those of Bitcoin at the hip, and Bitcoin is showing signs of keeling over:

Left: Flags on Bitcoin | Right: Liquidity (GLI Indicator on tV)

Both the technicals and liquidity suggest it's time for Bitcoin's next leg down. Perhaps the final leg down, before it starts bottoming. (Yes, these measures are reliable; you can see track record of this here on X.)

Here's a sensitivity table based on BTC price and mNav, given the current balance sheet:

MSTR price sensitivity table (my calculations)

(The negative numbers are mathematical - at that point, MSTR starts being priced like an option.)

Based ON Bitcoin's expected trajectory, I expect MSTR to hit $40ish in the next 8-12 weeks.

Ironically, the saving grace is the $4.65B in USD reserves. Without it, MSTR would be in the teens if Bitcoin fell more than half. You can see that effect here:

Strategy balance sheet at current BTC price and BTC @ $12K (my calculations)

What invalidates this? Bitcoin finding a bottom sooner, and even starting to move up. Which will happen when Treasury yields fall, and there is a major liquidity pump. Hard to see that without a recession, and there are few signs of that.

So I feel pretty comfortable with this prognosis. At least directionally.

Positions: None yet; will initiate with MSTZ next week.

Note: This is my assessment and opinion. I place high probability on this coming to pass, but there's always a chance that it does not.

While Strategy management is running around like a headless chicken and changing strategies like one changes underwear, I believe $MSTR is lining up for another leg down.

Simply because Strategy's fortunes are tied to those of Bitcoin at the hip, and Bitcoin is showing signs of keeling over:

Left: Flags on Bitcoin | Right: Liquidity (GLI Indicator on tV)

Both the technicals and liquidity suggest it's time for Bitcoin's next leg down. Perhaps the final leg down, before it starts bottoming. (Yes, these measures are reliable; you can see track record of this here on X.)

Here's a sensitivity table based on BTC price and mNav, given the current balance sheet:

MSTR price sensitivity table (my calculations)

(The negative numbers are mathematical - at that point, MSTR starts being priced like an option.)

Based ON Bitcoin's expected trajectory, I expect MSTR to hit $40ish in the next 8-12 weeks.

Ironically, the saving grace is the $4.65B in USD reserves. Without it, MSTR would be in the teens if Bitcoin fell more than half. You can see that effect here:

Strategy balance sheet at current BTC price and BTC @ $12K (my calculations)

What invalidates this? Bitcoin finding a bottom sooner, and even starting to move up. Which will happen when Treasury yields fall, and there is a major liquidity pump. Hard to see that without a recession, and there are few signs of that.

Overall, I feel pretty comfortable with this prognosis. At least directionally. Will be realizing this with options and/or LETFs.

Larry Cheng recently suggested that the convert holders agreeing to take shares for debt is a vote of confidence from them.

It's not that straight forward, and some nuance is necessary here.

What he says makes total sense from a VC's point of view. They are all about the explosive upside. And when they offer debt, its so that they can convert to equity. It's why SAFE notes are a thing.

But that's not quite how corporate debt swaps work.

First, recall that convert bond buyers heavily shorted the stock to delta hedge:

• The first $1.5B 0% Notes due 2030 priced on Mar 27, 2025 resulted in the +20M shares shorted spike between 3/14/25 and 4/15/25. SI went from 7% to 12%.
• The second $2.25B 0% Notes due 2032 priced on Jun 12, 2025 resulted in the tall-ass bar of ~+33M shares shorted, around the 6/13–6/30/25 settlement window. Larger raise, so bigger spike in SI. SI went from 12% to 19%.

Of course, it wasn't just the convert holders shorting - the market piled on too, to front run and profit from this.

We can see this visually below:

Source: https://chartexchange.com/symbol/nyse-gme/short-interest/

It is possible that some of this paper has been sold but given the recency and the continued high vol GME enjoys, I'd expect a lot of them to still be holding.

Anyhow, the first thing we can expect is that this SI connected to these converts should fall, as $1.4B represents 37% of the converts outstanding. Could translate up to 3-4% of reduction in SI as hedges are closed. We won't see this until after Sep 23, 2026 though as that is when this transaction closes, but this can provide some tailwind if done in a short period of tie.

The second perhaps more interesting thing happens in the meantime. Because of this whole 35-day VWAP thing, those doing the debt-for-equity are exposed to GME price fluctuations. To lock in the value of the shares they're about to receive, these guys would short into the averaging period to lock in the value of the shares they are about to receive.

To be clear, this is transient new short-sale flow, which then unwinds at settlement. The actual amount of shorting will depend on how much GME falls. Unfortunately, this contributes to the headwind that the stock is facing as market prices in all that dilution too.

So.. two major takeaways here:

1. SI will likely go up over the next month before coming down a few percentage points after the debt-for-equity swap concludes
2. Larry Cheng's note misses the mark in terms of what is happening

For reference, here is his tweet and my response below:

https://preview.redd.it/e4taqv8o6qhh1.png?width=601&format=png&auto=webp&s=4c93658ede0c4926d2d0aeed397cae7bdb2df8ff

Larry Cheng recently suggested that the convert holders agreeing to take shares for debt is a vote of confidence from them.

It's not that straight forward, and some nuance is necessary here.

What he says makes total sense from a VC's point of view. They are all about the explosive upside. And when they offer debt, its so that they can convert to equity. It's why SAFE notes are a thing.

But that's not quite how corporate debt swaps work.

First, recall that convert bond buyers heavily shorted the stock to delta hedge:

• The first $1.5B 0% Notes due 2030 priced on Mar 27, 2025 resulted in the +20M shares shorted spike between 3/14/25 and 4/15/25. SI went from 7% to 12%.
• The second $2.25B 0% Notes due 2032 priced on Jun 12, 2025 resulted in the tall-ass bar of ~+33M shares shorted, around the 6/13–6/30/25 settlement window. Larger raise, so bigger spike in SI. SI went from 12% to 19%.

Of course, it wasn't just the convert holders shorting - the market piled on too, to front run and profit from this.

We can see this visually below:

Source: https://chartexchange.com/symbol/nyse-gme/short-interest/

It is possible that some of this paper has been sold but given the recency and the continued high vol GME enjoys, I'd expect a lot of them to still be holding.

Anyhow, the first thing we can expect is that this SI connected to these converts should fall, as $1.4B represents 37% of the converts outstanding. Could translate up to 3-4% of reduction in SI as hedges are closed. We won't see this until after Sep 23, 2026 though as that is when this transaction closes, but this can provide some tailwind if done in a short period of tie.

The second perhaps more interesting thing happens in the meantime. Because of this whole 35-day VWAP thing, those doing the debt-for-equity are exposed to GME price fluctuations. To lock in the value of the shares they're about to receive, these guys would short into the averaging period to lock in the value of the shares they are about to receive.

To be clear, this is transient new short-sale flow, which then unwinds at settlement. The actual amount of shorting will depend on how much GME falls. Unfortunately, this contributes to the headwind that the stock is facing as market prices in all that dilution too.

So.. two major takeaways here:

1. SI will likely go up over the next month before coming down a few percentage points after the debt-for-equity swap concludes
2. Larry Cheng's note misses the mark in terms of what is happening

For reference, here is his tweet and my response below:

https://preview.redd.it/e4taqv8o6qhh1.png?width=601&format=png&auto=webp&s=4c93658ede0c4926d2d0aeed397cae7bdb2df8ff

I'd reviewed MSTR about a month ago (Mid-2026 Review for MSTR), following up given much has been happening over the last few weeks that affects shareholders, often at their expense.

First, a summary of all the transactions from the previous 6 weeks:

• Issued about 31.4M MSTR for $3.05B (8.3% dilution)
• Sold a net of 4,706 BTC for $285.8M
• Built roughly $2.9B of additional dollar reserves
• Bought back $106.2M of discounted STRC
• Left debt principal essentially unchanged

Clearly, his focus was on shoring up on liquidity and improving credit worthiness of the company. A defensive recapitalization of sorts, to pre-fund senior obligations and prevent forced BTC liquidation at the worst possible time.

Which is all well and good, except it came at the expense of shareholders. And this damage is permanent.

1. Yield took a major hit, going down -4.31% over the previous four weeks, following the -3.58% hit a month ago.

Transaction yield / basic shares (my calcs)

2. As a result, BTC per share has decreased to where we were about a year ago.

BTC per 1M Diluted Shares (my calcs)

3. And every share sale is erosive - he gets only 2BTC worth of USD while the shares are backed by 3 BTCs:

Market Cap / BTC NAV

This has nothing to do with EV-based NAV or CEBE by the way. Those measure different things.

To me, this is a tragedy, as shareholders bleed out while a clueless and mercurial management team at Strategy try to learn on the job...

The STRC Angle

This predicament is doubly unfortunate since the impact on STRC is limited. Despite spending all of this - max rate, buybacks, a $4B reserve - STRC is still ~10-11% below par... The core issue is while these defenses are supply-side, the problem is demand-side. In a BTC downtrend with SATA offering higher yields, demand for 12% bitcoin-affiliated paper at $100 will be weak, no matter what Strategy does.

Saylor is learning that you can't buy your way to a peg the market doesn't want. Which implies that he's burning permanent shareholder value to slow a bleed he can't stop.

Ofc one could counter that one can't see the counterfactual - without the reserve and buybacks, and STRC might have been stuck in the 80-handle still...

To the extent that we will be in a bear market for a while longer, I shudder to think how much more damage he will inflict before we see a bottom as he tries to keep his flagship product going.

---------------------------------------------------------------------------------------------

Details of transactions from SEC filings (thanks, AI Sol):

• BTC:
  • 520 BTC bought for $34.9M,
  • 5,226 BTC sold for $320.7M;
  • net 4,706 BTC sold for $285.8M net cash inflow.
• MSTR:
  • 0 shares repurchased,
  • 31,375,476 shares issued/sold for $3.053B;
  • net 31,375,476 shares issued for $3.053B.
• Cash:
  • $3.374B of identified gross inflows,
  • at least $141.1M deployed into BTC and STRC;
  • net USD Reserve increased by $2.9B.
• Debt:
  • $0 issued, $
  • 0 principal repaid;
  • net debt unchanged.
• STRC:
  • 1,201,073 shares repurchased for $106.2M,
  • 0 shares issued;
  • net 1,201,073 shares repurchased for $106.2M.
• Other preferreds - STRF, STRK, STRD and STRE:
  • 0 bought,
  • 0 sold/issued;
  • net no change.

Things just got real! Now that RC's physically settled all 39,046,658 Put/Call Pair shares at the $101.30 strike for ~$3.955B, GME now owns 43,390,383 shares, or about 9.8% of eBay.

This has a couple of implications, which I will lay down below.

GME is now a ~50% eBay holding company

The eBay stake is now GME's single largest asset, and is worth just a bit more than the retail business.

GME's sum of parts is as follows:

• eBay stake: ~$4.8B (49%)
• Retail operating business: $4.3B (44%)
• Bitcoin: ~$0.4B (4%)
• Net cash: ~$0.3B (3%)

Unrealized eBay position profit is +$470M

By physically taking delivery of the underlying options contracts and executing open-market buys, GME's locked profits from its enviable cost basis:

• Aggregated Cost Basis: ~$101.29 per share (Total cash outlay: ~$3.96B).
• Current Market Price: ~$112.13 per share.
• Per-Share Unrealized Gain: +$10.84 per share (~10.7% return on deployed capital).
• Total Unrealized Gain: 43.39M shares x $10.84 = ~$470.3 Million in mark-to-market profit.

The corollary to this is, every $10 swing in eBay's share price has a P&L impact of ~$434M. Here's to hoping that's not a double-top on eBay, and we don't visit the PoC on a market pullback.

1-year eBay price action

Btw under GAAP rules, because GME owns under 20% of eBay, it must mark this stake to market quarterly. Looks great for this coming quarter, but it also injects net-income volatility into GME’s earnings based on eBay’s share price swings.

9.8% ownership allows RC to exit position without disgorgement

RC has engineered a regulatory sweet spot by freezing GME's physical stake at 9.8%. The mechanics of Section 16(b) short-swing profit rules dictate that the 10% threshold must be crossed at the time of both the purchase and the sale for "disgorgement" to occur. I.e. give the profits back to eBay.

Even if eBay runs a share buyback and shrinks the float, pushing GME's ownership to > 10% without RC buying more shares, this stipulation holds because GME becomes a 10% passively. Because he was not a 10% owner when the original purchases were made, those initial purchases are legally "exempt" from being matched against a future sale under Section 16(b).

Income-Mix Impact of Interest vs. Dividend is ($120M)

Shifting ~$4 billion out of risk-free Treasuries into dividend-paying common equity creates a negative cash-flow carry on GameStop's income statement. Specifically:

• Interest on the ~$4.35B (@ ~4%): ~$174M/yr
• eBay dividend (@ ~1.1%): ~$54M/yr
• Net change: ($120M)/yr

Tax treatment softens this slightly, as interest is ordinary income while dividends get a 50% dividends-received deduction because GME owns < 20% of eBay.

Qualitatively, this also swaps out a stable interest stream with a volatile equity marked through net income, on top of the Bitcoin volatility that already produced a > $130M crypto loss last year.

Things just got real! Now that RC's physically settled all 39,046,658 Put/Call Pair shares at the $101.30 strike for ~$3.955B, GME now owns 43,390,383 shares, or about 9.8% of eBay.

This has a couple of implications, which I will lay down below.

GME is now a ~50% eBay holding company

The eBay stake is now GME's single largest asset, and is worth just a bit more than the retail business.

GME's sum of parts is as follows:

• eBay stake: ~$4.8B (49%)
• Retail operating business: $4.3B (44%)
• Bitcoin: ~$0.4B (4%)
• Net cash: ~$0.3B (3%)

Unrealized eBay position profit is +$470M

By physically taking delivery of the underlying options contracts and executing open-market buys, GME's locked profits from its enviable cost basis:

• Aggregated Cost Basis: ~$101.29 per share (Total cash outlay: ~$3.96B).
• Current Market Price: ~$112.13 per share.
• Per-Share Unrealized Gain: +$10.84 per share (~10.7% return on deployed capital).
• Total Unrealized Gain: 43.39M shares x $10.84 = ~$470.3 Million in mark-to-market profit.

The corollary to this is, every $10 swing in eBay's share price has a P&L impact of ~$434M. Here's to hoping that's not a double-top on eBay, and we don't visit the PoC on a market pullback.

1-year eBay price action

Btw under GAAP rules, because GME owns under 20% of eBay, it must mark this stake to market quarterly. Looks great for this coming quarter, but it also injects net-income volatility into GME’s earnings based on eBay’s share price swings.

9.8% ownership allows RC to exit position without disgorgement

RC has engineered a regulatory sweet spot by freezing GME's physical stake at 9.8%. The mechanics of Section 16(b) short-swing profit rules dictate that the 10% threshold must be crossed at the time of both the purchase and the sale for "disgorgement" to occur. I.e. give the profits back to eBay.

Even if eBay runs a share buyback and shrinks the float, pushing GME's ownership to > 10% without RC buying more shares, this stipulation holds because GME becomes a 10% passively. Because he was not a 10% owner when the original purchases were made, those initial purchases are legally "exempt" from being matched against a future sale under Section 16(b).

Income-Mix Impact of Interest vs. Dividend is ($120M)

Shifting ~$4 billion out of risk-free Treasuries into dividend-paying common equity creates a negative cash-flow carry on GameStop's income statement. Specifically:

• Interest on the ~$4.35B (@ ~4%): ~$174M/yr
• eBay dividend (@ ~1.1%): ~$54M/yr
• Net change: ($120M)/yr

Tax treatment softens this slightly, as interest is ordinary income while dividends get a 50% dividends-received deduction because GME owns < 20% of eBay.

Qualitatively, this also swaps out a stable interest stream with a volatile equity marked through net income, on top of the Bitcoin volatility that already produced a > $130M crypto loss last year.

The chart looks like death - its crashing through SMAs and isn't even oversold yet. Yet, Sandisk is in an oligopoly with Samsung and SK Hynix, wielding massive pricing power. What do?

YTD chart for SNDK

Obviously, no one can answer that question for any of us specifically, as it depends on our risk tolerance, cost basis, how our portfolio is structured, if one knows what one is doing, etc.

The ONE question

However, this one question will help one every time: If I did not have a position now, would I initiate one?

That's it.

Answer that honestly, and you'll know what to do. Saves one from the pernicious trap of Sunk Cost Fallacy, amongst other things.

The FOUR rules of investing

There's only four things we need to do to make it in the stock market:

1. Preserve capital
2. Preserve capital
3. Preserve capital
4. Take profit

The best investors made it not because they kept hitting home runs, but because they did not let themselves get stuck in a -50% hole and roundtrip to break even while others made +100%.

News failure

Many here seem to be looking forward to warnings for salvation. Be wary of that, as TSM and ASML both beat their earnings and provided decent guidance, but they all still went down. It's called "news failure" - when the news says the stock should do something, but it goes in the other direction. Usually signals the end of a trend.

The market cycle

Finally, check out the graph below. (Source) In my view, we are at Anxiety, on our way to Denial. I could be wrong; nevertheless I present this to you so you know where we very likely stand with respect to price action.

https://preview.redd.it/ukkr6w786ydh1.png?width=768&format=png&auto=webp&s=ed3291e20e87a98091aaf4ae463e76685c746f26

Tl;dr:

• This is a pretty standard convertible bond deal for a per-revenue company with high realized volatility
• Cash cost is capped at 3.4% "APR" if price < $149.20
• Over > $149.20, "APR" increases with share price (e.g. 9.9% at $200)
• ASTS is selling realized vol at half its actual level, providing economic value of $77M-$322M - this is the real, unstated cost.

Overview

There's been a fair bit of chatter on how to value this CB transaction, so writing this up to break it down into its economic parts.

First, the transaction specifics:

• ASTS priced $1.0B of 1.625% convertible senior notes due Feb 1, 2034
• It's convertible at $79.57 per share - a 20% premium to the $66.31 reference price
• Non-callable for life.
• ASTS $96.9M on capped call transactions raising the effective conversion price to $149.20 - a 125% premium.
• Net proceeds were $983.6M before the capped call, ~$886.7M after.

The first thing to recognize is this CB has two components: a) a straight bond and b) an embedded equity call option. I'll value each against market benchmarks so we get a sense of the actual all-in annualized cost of the financing across stock-price scenarios.

The key takeaway is that the 1.625% coupon is fairly close to what the deal genuinely costs - ~3.4% a year in nearly all outcomes. But the real price was paid in option value, with ASTS selling 7.5-year volatility at roughly half its realized level.

Let's get into the details.

Debt component

This is pretty straight forward. The bond value of the notes is roughly $576 per $1,000 (~$576M of the deal), assuming a ~500bp credit spread over the 4.45% 7-year Treasury. This ~9.5% straight-debt-equivalent yield for a unrated, pre-cashflow issuer seems pretty standard.

What ASTS pays against this does seem like a steal - the notes' cash cost is just 1.625% ($16.25M/year; $121.9M of total coupons), saving roughly $79M/year versus conventional debt. This is great.

Option component

This is where things get interesting, and we have to model things out.

The balance of the notes' value is a 7.5-year embedded call on 12.57M shares varies anywhere between ~$500M and $700M within a volatility assumption of 50% to 90%:

Embedded option value by Realized volatility (Modeled with Claude Fable 5)

Investors effectively paid ~$424M for it (par minus bond floor), an implied volatility of ~34%. This underpricing of the option, not the coupon, is the deal's true cost.

What that cost is totally depends on what we think a reasonable realized volatility number is. Here's the result for both 50% vol and 90% vol:

Economic concession provided by ASTS

Note that we have to entertain this range of vol options even though RV is currently > 100% because this is a 8-year paper.

The economic value of $77M and $322 is the "vol harvesting" to be done by the buyers.

While it is not a cash cost to shareholders, it is still economic value provided that shareholders are not realizing.

All-in cost

Let's convert the costs to APR terms (using IRR) so they are comparable.

Below $149.20

If the stock closes below $149.20 in 2034, the costs ASTS will have incurred are:

• Coupon: $8.125M semiannually
• + Underwriting fees & expenses: ~$16.4M
• + Capped call premium: ~$96.9M

Giving us an APR of 3.36%.

Note that half the all-in cost is the coupon, and nearly half is the capped call, with fees a rounding error.

The reason the capped call looms so large despite being "only" $96.9M is that it's paid entirely upfront out of proceeds - ASTS effectively borrowed $1B but only banked $886.7M of usable cash, and amortizing that ~11.3% haircut over 7.54 years at compound rates costs about 1.7% per year gross.

Above $149.20

Above the cap of $149.20, dilution resumes and the effective cost rises (see below). E.g. if ASTS is at $200 in 2034, the effective cost of this financing would be 9.9%. And 18.2% if share price is $300.

APR by share price

These scenarios involve substantial shareholder gains though, so doubt we'll mind this.

Overall Assessment

Overall, this is a pretty standard convertible deal. And an appropriate one for a company like ASTS that: a) is still raising cash and would rather not add significant debt servicing to its commitments, b) believes strongly in its own upside, and c) has high volatility that convert investors will pay for.

This comes at the cost of selling long-dated volatility at roughly half its realized level, unhedged dilution above $149.20, delta hedging pressure (initially shorting) on the stock from the buyers, and a $1B maturity wall in 2034 if the stock stalls below $79.57..

Clearly, there are tradeoffs. But such is life.

Disclosures:

• I trade ASTS actively - both on the long and short side
• I used Claude Fable 5 for the binomial option pricing simulation and the APR cacls

As I noted in 2025 - A Year in Review, 2025 was a tough year from MSTR. The first half of 2026 continues to be tough both because of BTC's price movement, and from various self-inflicted wounds.

Lets visit our north stars - we care about MSTR because it provides BPS yield, and because we should outperform BTC when times are good.

Absolute performance: Bitcoin per share (BPS)

Q1 saw bitcoin per share dip from a series of non-accretive transactions. Q2 saw decent recovery at first from a couple of mammoth STRC-supported transactions, but since then we have dipped again.

Bitcoin per 1M diluted shares

That's the constant buying irrespective of market conditions was not value accretive to shareholders is evident below:

• The graph on the right shows yield fluctuating between positive and negative to relatively equal measures. Strategy has control over this - chooses when the ATM, and how much STRC to support transactions with. Yet half the time, he chose to buy bitcoin even when it was not accretive. Note that this damage is irreversible.
• The graph on the left is even more damning. For pretty much all of 2026, Saylor sold shares backed by 1 BTC to buy less than 1 BTC (the red dots). The saving grace is, he couple this with STRC time to time, so the net yield was not negative. Nevertheless, quite the waste of shares.

Left: MCap-based mNav | Right: Transaction yield

Note that the BPS-based measure is distinct from EV-based mNav and CEBE. E.g. it tracks the terminal condition we are interested in, not who would get how much of the bitcoin if MSTR stopped being a going concern tomorrow.

Relative performance: MSTR vs BTC

We can be a bit more forgiving here, as BTS has been a secular downtrend, pulling MSTR lower. (E.g. called out 2 months ago: A local top for MSTR may be in. $13x could be next.)

Nevertheless, the reality is anyone who bought MSTR after Mar'24 has under-performed BTC. 2 years and 4 months.. yeesh.

MSTR/IBIT since IBIT's inception

To the extent that MSTR is leveraged exposure to BTC and it'll go where BTC goes, I fear there's a bit more downside yet. Specifically, I expect BTC to fall to $50K, and thus MSTR to be around $60, based on my EV-based model:

EV-based model (Jul 10)

Saylor's erratic actions are not helping here btw - the negative sentiment is showing up as depressed mNav. But that's a different topic, for another time.

Disclosure

I continue to swing trade MSTR in both directions, mostly riding the BTC waves. Going long will have to wait until BTC bottoms.

Source: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001065088/000106508826000135/ebay-20260617.htm

1. Prop 4 failed with 6% fewer votes - 49% in 2025 vs 42.8% in 2026.

https://preview.redd.it/6hnv3clcn38h1.png?width=751&format=png&auto=webp&s=f13a76c254ad7a9c7b7f06b4bad5a25cf3f93f84

Prop 4 passing would have allowed someone with > 10% ownership to call a special meeting.

2. Directors all got a smidge fewer "For" votes in 2026.

https://preview.redd.it/ubh58xvln38h1.png?width=768&format=png&auto=webp&s=5a3aca3b0bc3942aa3fa36707d56e86e702a19ef

Formula: For / (For + Against + Abstain)

Given that they are almost all in the high 90's, and the drop in support is generally 1% of less, I wouldn't read too much into it.

https://preview.redd.it/ckxpozu3o38h1.png?width=775&format=png&auto=webp&s=b1bc431eabfc09f418816eaa4d643d1cd831ada8

All in all, Prop 4 failing more clearly in 2026 and support for Directors staying very high does not bode well for RC's attempts for a hostile takeover of eBay by GME, imho.

Disclosure: All images were created by Claude using both 2025 and 2026 8-Ks.

Source: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001065088/000106508826000135/ebay-20260617.htm

1. Prop 4 failed with 6% fewer votes - 49% in 2025 vs 42.8% in 2026.

https://preview.redd.it/6hnv3clcn38h1.png?width=751&format=png&auto=webp&s=f13a76c254ad7a9c7b7f06b4bad5a25cf3f93f84

Prop 4 passing would have allowed someone with > 10% ownership to call a special meeting.

2. Directors all got a smidge fewer "For" votes in 2026.

https://preview.redd.it/ubh58xvln38h1.png?width=768&format=png&auto=webp&s=5a3aca3b0bc3942aa3fa36707d56e86e702a19ef

Formula: For / (For + Against + Abstain)

Given that they are almost all in the high 90's, and the drop in support is generally 1% of less, I wouldn't read too much into it.

https://preview.redd.it/ckxpozu3o38h1.png?width=775&format=png&auto=webp&s=b1bc431eabfc09f418816eaa4d643d1cd831ada8

All in all, Prop 4 failing more clearly in 2026 and support for Directors staying very high does not bode well for RC's attempts for a hostile takeover of eBay, imho.

Disclosure: All images were created by Claude using both 2025 and 2026 8-Ks.

We still have over a month to vote, and I am in no rush as much can change in that time. However, this is one of the very few times shareholders have a say, and I want to be deliberate about the process.

Wanted to share my thinking as I haven't quite seen it reflected in the Posts thus far, which tend to fall into one of these categories.

• Have full faith and trust in RC: FOR
• Still holding out for MOASS: AGAINST
• Tired of waiting and want some exit: FOR
• Sees bad actors everywhere: FOR

I'll start with what I consider are the most important questions and work my way down. Refer to the Proxy Statement for GME's point of view.

PROPOSAL 4: APPROVAL OF CEO PERFORMANCE AWARD

Tentative vote: AGAINST

I have a detailed post on this here. Summary:

• The request is egregious by any stretch of imagination.
• Compensation is NOT aligned with shareholder value creation. RC makes $18B in new equity taking 18% of the company, and 2000% his current position. Whereas shareholders make +100% over that time.
• I did not appreciate the Proxy pretending shareholders would make 463%+, not pricing in any future capital raises, or any future M&A (including eBay).
• 10's of BILLIONs is not justified because someone chose not to draw 10's of millions in salary.

What will change my mind: A much more reasonable ask that is aligned with shareholder value creation.

OC w/ Gemini

PROPOSAL 1: ELECTION OF DIRECTORS

Tentative vote:

• Ryan Cohen - FOR
• Alain (Alan) Attal - AGAINST
• Lawrence (Larry) Cheng - AGAINST
• James (Jim) Grube - AGAINST
• Nathaniel (Nat) Turner - FOR

Thinking behind this vote:

• The GME Board is a rubber stamping one for RC. That has worked well since 2021 to downsize and get to profitability, but I think we need fresh/additional blood for the next chapter.
• The three AGAINST votes are for those who are on the Compensation Committee. They have failed in their fiduciary duty to align executive comp with shareholder value, and should go.
• Voting FOR for RC because he's the Captain until he steps down, and Nat is newer and for continuity.

What will change my mind: Unsure.

If anything, GME's Board should expand out of the previous company clique to 9-11 members, like most other public companies.

PROPOSAL 5: APPROVAL OF AMENDMENT NO. 2 TO OUR CERTIFICATE OF INCORPORATION TO INCREASE AUTHORIZED SHARES OF COMMON STOCK

Tentative vote: FOR

The Captain asked for rope, and so he shall be given rope. The full 1.5 extra yards.

I suspect the eBay deal is a ruse to get this and Prop 4 passed, but I also think its possible to go after more reasonable deals. And this gives him runaway to do that.

What will change my mind: Unsure.

OC w/ Gemini

PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION

Tentative vote: FOR

No reason to vote against this, and company is profitable now so a bump is warranted. And its advisory and non-binding anyway.

Page 28

What will change my mind: Unsure.

PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

KPMG LLP is fine. They are a big four.

What will change my mind: Big scandal involving aliens and intergalactic money laundering.

Shares held: Enough to vote.

I look forward to a constructive discussion.

Tl;dr: Captain RC makes a great show of hunting a whale too big to land, wins the crew's vote for more rope and a captain's share to do it, then blames the weather and a spooked whale when it gets away, pocketing the gear for the hunt he actually planned.

Generated with Gemini

The offer is unserious on its face ...

This eBay offer is one of the most unusual acquisition offers I’ve seen. And a particularly unserious one at that. Consider the following:

• GME (market cap ~$9.7B) is attempting a hostile reverse merger to absorb a company nearly five times its size. These are rare, difficult and complex even when both parties are willing.
• The financing is soft: $9.4B cash + non-binding "highly confident" letter from TD Securities for ~$20B debt.
• GME has conducted no deep due diligence as it concedes that it has never seen eBay's books, making synergy estimates mostly guesswork.
• Stake is ~7.8% economic exposure but almost entirely via long-dated put/call derivatives, with only ~25k direct shares (0.006% voting power). Thus, no meaningful leverage for proxy fight or board replacement.
• RC’s narrative that eBay is "obese" and needs "Ozempic-style" cost-cutting conflicts with financial realities: eBay maintains an enviable 27% operating margin vs GME's 6.4%. Also, eBay made $2B profit on $11B revenue.
• His narratives about executive compensation rile people up, but they miss the mark. The vast majority of officers are EMPLOYEES. Stock and option grants are part of their deferred COMPENSATION where they make money if the stock goes up, keeping their comp aligned with shareholder interests. Conflating that with the interests of a billionaire investor-operator is disingenuous.
• Tactics so far have emphasized public spectacle: X memes, sock-selling stunts, executive comp attacks, and combative/evasive CNBC interview, rather than credible engagement with eBay. None of this will build confidence with institutional shareholders.

It doesn’t surprise me that eBay Board rejected the offer as “neither credible nor attractive,” market is pricing in a ~25% chance of the deal going through, and Polymarket, at a lower 16%.

If the offer is unserious, then what is the point?

.. yet the two votes need the eBay story to pass

Enter what’s on the ballot. As we can imagine, the 2.5B Authorized Shares increase + RC's Pay Package would not pass on a standalone basis, given the strong anti-dilution sentiment amongst shareholders and likely scrutiny over a multi-billion-dollar comp package for a CEO who rails against “hollow men.”

The eBay “Story” provides the urgency, excitement, and narrative cover for the necessary "war chest."

Thus, we can expect to see the eBay drama continue to build momentum for the very July 7 votes needed to remove those barriers.

The procedural gates provide plausible deniability for not committing

Because any Schedule TO binding tender offer would be heavily conditioned on (a) share authorization passing, (b) binding financing, and (c) minimum tender thresholds, rendering it non-credible and exposing GME to SEC scrutiny/lawsuits under anti-fraud rules, RC has plausible deniability on why a definitive/binding offer cannot be launched right now.

Note that many of the gates are self-constructed:

• He went public before making private overtures, forcing him to disclose things to the benefit of the “war chest” narrative
• He chose a 50%-stock structure that triggers the entire S-4/authorization/issuance-vote stack (an all-cash deal would not)
• And he choose synthetic exposure over the voting stock so he wouldn’t have to run a proxy fight

This is speculative, but the obstacles are ever so conveniently sequenced to sit ahead of him... Between an unwilling counterparty and unmet prerequisites, his intent stays unfalsifiable.

RC wins even as the eBay bid fails

Given the unseriousness of the bid, I find it difficult to see how it passes.

Thankfully for RC, the authorization and the pay award are decoupled from the deal: both survive a dead bid. If the votes pass on the strength of the narrative, Cohen walks away with standing authority to issue ~2B shares and a pay package whose hurdles future deals could satisfy.

For what it’s worth, there is a consolation prize if the eBay offer does not go through. The derivatives stake has already produced substantial paper profits from the post-announcement pop. Current estimates are around $300M.

Of course, then we get to wait and see who he really goes for, with the additional shares and motivated by the additional comp.

Giant squids, anyone?

Disclosure: I used AI to proofread the writing, and generate the image. Thoughts are my own.

ASTS is back near ATHs, buoyed by the upcoming shipments of BB8–10 and SpaceX IPO news. I'm sure many folks are up big!

https://preview.redd.it/cwigcrtdmp3h1.png?width=1481&format=png&auto=webp&s=de7313b5e669f92cc28c7000e7bd984429ec8655

This looks like an excellent time to put on a collar.

An Oct '26 50% OTM 190C fully pays for the 115P/70P put spreads, offering 10-45% downside protection over the next 4.5 months:

https://optionstrat.com/build/custom/ASTS/ASTSx100,.ASTS261016P115,-.ASTS261016C190,-.ASTS261016P70

This is the risk profile if one has a $100 cost basis.

https://preview.redd.it/l6c8ssynmp3h1.png?width=1236&format=png&auto=webp&s=8fa54b48ec2123103cc87b320fde6afee203f3dc

The downside is, one's up side is capped to $190 (+50% from here) for the next 4.5 months.

NFA. Shared for informational purposes only. Do let me know if you have any questions!

This is a followup from my post 10 days ago on option flows.

Option flows continue to indicate that the deal is more likely to happen than not.

With GME, we see:

• Sustained call selling
• Very little put activity

This suggests the options market does not expect GME to go up. (Hence the call selling.)

Folks are not selling puts because there's a chance an upped offer is made, which can make GME go down more.

Source: Tradytics

With eBay, we see:

• Call buying as the week starts, and then profit taking on Thu
• Put selling

This suggests market does not expect eBay to go lower for the time being.

Source: Tradytics

In terms of OI, we see a reduction in 120Cs and 125Cs. Probably profit taking from sold calls. We also see a bit more OI for 130C+, suggesting folks are selling higher strikes in anticipation of a higher bid.

Source: Tradytics

Do let me know if you have any questions.