u/Patarokun

I've prepared myself to be downvoted into oblivion, but here's a cool-headed take on warrants. At least worth considering. 🤷

When warrants were issued a year ago Cohen and the team had the eBay idea mapped out. They knew it wouldn't be easy but that if things went well around now they'd be inking a deal for a merger.

This would send GME way up and as a reward investors they preloaded the $32 warrants. A nice gift for holders and a bag of cash for the business.

The eBay request happens and I think Cohen was legitimately surprised how harsh the backlash was. In that one interview he expressed frustration about how everyone roots against GameStop and how the deal is a no-brainer if you just look at the facts.

This sends him back to the drawing board, working on alternative funding, shoring up debt issues as we saw with the early bond thing, it's all taking a long time. That's fine, he's patient and persistent, but it does mean the warrants aren't going be at $32 in time.

So many people think they're going to do some trickplay to get them in the money or extend, but we're nearly out of time here. Cohen and the board have shown this whole time that they DON'T like to do business gimmicks and just play things straight down the middle. It would be out of character.

There's a very real chance the warrants were an idea that just didn't come to fruition and they'd rather let them expire and move on with the plan. As Cohen said he doesn't care if people like him, he's going to do what's best for the business. That might mean letting go of sunk-cost fallacy and just letting warrants expire.

If true I'm not too bummed. They cost us nothing, the dilution doesn't happen, and we can finally move on.

Ok you can smash that downvote now!

A lot of people have been asking, now that half of our company is eBay shares, what happens if either naturally or through market manipulation the eBay stock tanks?

It was at $80 before the events of this year created interest and upward pressure. If it hit $80 again GME would be down 1 billion dollars on paper, and I'm sure the antagonistic media and shills would be having a field day, and our share price would be in the teens.

However, if that happens:

• Buybacks can backstop our own loss of value.

• The $125 offer looks more appealing (but would probably have to have more cash in it, as the half-stock GME would call for even more shares than it already does if we're in the teens)

• But most importantly, if that happens, it removes the last leg the eBay board has to stand on, which is that the eBay stock has been doing well. If eBay loses 30% of its value in the next few months, it's easy to ask what the board and executives have been doing that justifies their salaries. Keeping the price propped up is why eBay has done all the buybacks recently, as Cohen has noted they're not growing userbase, they're just inflating stock value.

• If eBay is lower it allows more buy in from parties who are sympathetic to Cohen's mission, perhaps helping us with the tender offer vote.

It seems like there's a lot of upside if eBay tanks. But we need to be aware that our own share price will take a beating too.

On the other hand if eBay soars (perhaps if another company tries to step in and beat GME's offer) we always have the option simply to sell out of our position. If eBay hit 150 for example and we sold it would be a 2 billion dollar profit free and clear.

And if it stays flat in this 112 zone Cohen gets runway to line up tender offer terms. All in all I like our position, almost as if the GME team knows what they're doing!

Hanging out here over the years, we've all gotten used to the fact that GME has been sitting on an enormous pile of cash, one of the highest cash to revenue numbers on the market.

This cash was earning a predictable 5% each year, and padded out many a lean quarter as the business turned around. And psychologically, it was comforting knowing that no matter what happened there was a huge cash parachute we could rely on.

Half of that cash has now been turned to eBay shares, and the other half is technically debt from the convertible notes (which can be repaid in shares later but still matters in accounting). That means we're now exposed to the ups and downs of another company and volatility is possible.

When that volatlity works for us it's going to feel great, but there could be bad days too where something with eBay impacts us badly. For years people have been complaining about how Cohen just sat on that money instead of doing something proactive with it. Well, now he has and he's taken on a huge challenge to take over eBay.

In my opinion this is the kind of bold move the company needs to make to finally break out of the short situation, but it's a whole lot riskier than just buying up a small 2 billion dollar company. When the bad days come stay strong and remember it's a lot more fun than passively collecting T-bills!

Do you get it now? It will never matter how well GameStop does, it simply doesn't have enough rocket fuel to escape the gravity well that market makers have on it. That's why Cohen is going big with the Ebay idea. We need to be making billions a year, not millions. We need to be on the S&P500. Cohen and the board are more sick of this price supression than any of us and are doing everything in their power to get the stock out of this tar pit!

I've been on this trade since DFVs first attention-getting Reddit posts. Have bought more at $50 and more at $10 and everywhere inbetween.

I don't see many people talking with any nuance about the Ebay play and the for votes that allow it to happen. I'm sure this post will be lost amongst the flashier stuff but I just want to get it out because this subreddit can make you feel crazy sometimes.

We've all seen the meme with Rorsach saying "I'm not stuck in here with you, you're stuck in here with me." In our case, I think we're all stuck in here together. Us household investors, Cohen, the board, everyone.

Despite a heroic effort and total turnaround in GME's business, the price has been locked in a narrow channel. If you find that galling, think about how Cohen feels, when no matter how well they execute, the price is squashed down year after year. I believe that Cohen understands the short situation in far more detail than we ever could, and has accepted that GME will never break these chains. There are simply too many obscure 50 year hidden swaps or whatever where the obligations can hide indefinitely. I don't think MOASS will ever happen with the current situation.

In my opinion, the only way to break this cycle is to make the underlying asset so valuable that holding those long term hidden swaps becomes too expensive to maintain. That means a business that makes real money and which is on the S&P 500 where it has some immunity for these petty market maker mechanics.

Cohen likes Ebay, he sees the synergies and has put his chips on the table. At no point has he taken himself out of alignment with the wishes of a shareholders. When we do well he does well.

Do I love everything about the deal? No. Do I love everything about Cohen? Absolutely not, and I find his political leanings very problematic. But we're stuck in this together and I think the Ebay idea is his best effort to make something happen. I have no problem with the executive package. The expectations are fair, he still has to put his own money in, and it hinges on execution, not just sitting in the chair when things happen. No one else would have taken on the challenge of the GME turnaround and hung tough for the 5 year slog, and I'm fine rewarding that.

You know you've found a good compromise when both sides agree but both sides are also somewhat disgruntled. That means the give and take was right. I'm at that "okay-with-it-but-disgruntled" place with the current votes, and so am voting "For".

It's okay to have mixed feelings about our situation, because our situation (ALL of our situation, Cohen included) kind of sucks! But we're working our way out of this hole brick by brick. 👍

We're the ones with our money on the line and have supported the company through thick and thin (mostly thin). You can see the DRS numbers holding strong for year after year. Household investors own ~70% of the company. Do we not deserve the courtesy of you explaining how this dilution will work and how it can make our asset more valuable?

Is that too much to ask? Make the case to us. Win us over.

GME offered convertible notes at the $29 zone.

GME offered warrants at $32, expiring in October.

GME is about to be forced to reveal its PowerPacks earnings as that product reaches materiality in the next earnings report.

GME almost always has a strong month of May.

Cohen understands the swap cycles and murky short interest better than anyone.

Cohen keeps saying "We'll see" and doesn't seem bothered at all by the deal "not making any sense" as our CNBC friends say. (And it's true, when the stock is low the deal doesn't make much sense in that GME holders will lose value.)

Cohen says it will be value accretive to GME holders which only happens at the 30-40 range.

All signs point up. And every dollar GME climbs the less outrageous the Ebay deal becomes.