u/adventurini

If I read one more message about how GameStop is cleaning up their balance sheet with their $1.4b note exchange I am going to have to sell all 92 of my shares.

There would be an argument if all $4.2b of the notes were getting exchanged, but we are not there yet.

Also, both notes have a put right dated April / December 2028. They can demand the principal back in cash on those dates.

But here is the point…

It’s not about cleaning up the balance sheet.

There is literally a provision in the notes where GME has to pay the notes back in cash if they merge with another entity and GME does not own >50% of that entity.

There probably isn’t a scenario in the universe where GME buys eBay and original holders own >50%. So the notes will become due.

This has been an oversight by anyone looking at this deal. GME doesn’t have to just come up with $56b and mega dilution. They have to face mega dilution or pay up $4.2b in cash on top, just to get there.

Only 1/3 of the notes have been exchanged thus far, though. And there isn’t an equity investor in the universe that would care about $1.4b but not the other $2.8b.

I honestly believe we will still see the other $2.8b come off and we will see another face melting blood bath.

So for anyone that invested in GME because of the growth and solid cash position / conservative strategy (me), it will be a really rough go for a bit.

We will have to pray the VWAP floor is somehow at least above $20. Even then… it’s 70m shares of extra dilution (20% of the company).

I really don’t see why only $1.4b would come off. So I think the other $2.8b is fairly high probability.

This all seems so unnecessarily reckless. Let’s hope there’s a plan.

I have made posts about share buybacks and get labeled as FUD and shilling. Not sure why.

Just a reminder that Ryan Cohen lobbies for share buybacks in his investments when the price is lower than he thinks it should be. He lobbied for $60b in buybacks for Alibaba.

Why did he buy shares personally but not use the company’s balance sheet to execute the same?

It feels like he wants the price to be low for some reason. Hard to make sense of it.

https://www.reuters.com/markets/deals/activist-investor-ryan-cohen-builds-stake-alibaba-wsj-2023-01-16/

This was the obvious escalation, but I was holding out hope for optionality on the activist bid. Converting to shares is the all in move.

The main contention is that a lot of us invested in GameStop because of the activism story and taking on the nefarious actors on Wall Street.

However, in order for the eBay deal to work, make no mistake, RC will have to make certain that Wall Street is a partner in the plan.

We are no longer fighting Wall Street. We are fully in bed with all of them and will need their blessings. They own the votes.

Also, if you believe in the mega short bag thesis, this lets them almost completely off of the hook.

For example, let’s say that they held a $100b dark pool position against GameStop. That would be absolutely impossible to cover with a $10b company. But a $50b company, they could cover.

Those nefarious hedge funds would already be getting bailed out in their eBay ownership cash print. And then they would be receiving a massive pile of equity in GME.

There is a non-zero chance that RC has traded that entire story and proposition to become the CEO of eBay.

The market would almost certainly reprice the combined entity downward after the deal closes, especially as institutions that don’t want any part of it take profits, and any bad actors could accumulate in the aggregate.

This scenario would be beneficial to GME over decades and centuries. But the odds of significant pumps are long gone.

If the combined company goes to a whopping $1t, we are looking at a 10x gain.

Sure that would be amazing. But eBay is a really, really long way from $40b in EBITDA.

I get that this feels like FUD, and I will be downvoted into oblivion, but where am I wrong?

The upside is far more capped and the downside is far less capped.

Congrats to all of us. We now own an absurd amount of exposure to eBay at all time highs and are betting on a multi year turnaround story and praying we become the darlings of the mainstream media and Wall Street.

I am a long term holder and generally believe in the GME mission and RC as a leader.

I just am having a hard time with yesterday’s interview.

How many interviews does he have to go on to tell the world he wants to buy eBay?

And it’s not just that, he books an interview with Bloomberg and he’s super combative the entire time.

The interviewer asks about the Teddy redirect and he says “I came here to talk about eBay.”

Well then why did you have teddy.com redirect to GameStop? You just wanted desperate retailers to short term trade the options? If you didn’t want to publicly talk about it, why the little games? Is that fun for you? Alluding to a population that something is coming, ad infinitum, but never deliver a something?

He’s so tone deaf. Half the retail traders are doing everything in their power to invest in this stock. He plays into all of it with ice cream tweets, Tetris profile pic, teddy redirect, power packs launch video full of meme hype.

You can’t play into it but then pretend you have absolutely no obligation to any of it.

You can’t be upset about price suppression, but you as a leader have actually done nothing to counter the suppression, but have helped destroy any chance of price discovery, whatsoever. And then pretend that it’s some other market mechanism.

You know what destroys price discovery? His interviews. You could short basically every interview he does. And you would smash. It seems almost nefarious and on purpose at this point.

The reality is that the market doesn’t really care about a recovered retailer. Or a combative CEO who really hasn’t turned the wheel on a growth story yet.

Retailers trade on RC’s cryptic bullshit. I can’t even imagine the billions of dollars retailers are down trading the options. Yet he praises us in his interview?

I think it’s time for him to stop the interview circus. The entire world gets it. You want to be eBay. Every single American with any sort of investment knowledge has heard about it. Everyone gets it.

They don’t care, obviously. Because your stonk is garbage. Until you move the needle on the stonk, no one will care except us: the little minions on this Reddit thread that are constantly supporting every move you have made.

It’s time for you to start pulling some levers and moving the stock. Put the eBay bid on a 45 day ultimatum timeline. Release the full package. Hedge the position. And do a billion in buybacks. And tell us what Teddy is.

Until then, for the love of everything holy, stop talking.

Nobody cares.

That’s why we’re here right?

These elitist financial villains control the money supply and manipulate markets, siphoning money from the lower and middle class.

They offer no value to society. They cause more harm than good. They are the people who start wars and don’t care at all if anyone dies.

They control the media. Every narrative fits their story. We pay attention to what they want us to pay attention to.

They control board rooms. Make fat stacks of cash for working 4 hours a year, because they have the credentials and network.

That’s why I’m here. I’m here because I’m sick of it. I want to see the man get destroyed. Once and for all.

I don’t care about your 20% S&P500 returns per year. I am here for the RECKONING.

Yesterday was the first domino to fall. eBay is smoke and mirrors, for now. Everything we are seeing has been in the works for a while now.

Ryan cohen doesn’t just go on a tv tour about buying eBay with dilution and then do a share buyback instead. He’s gunning for them.

“It’s all a part of the plan.”

Tomorrow.

Stay with me on this one.

Ryan Cohen’s comp package has a 10 year limit on it.

So I decided to look backwards instead of forwards, and apply his hurdles to the combined entity of eBay and GME starting in 2016.

GME has EBITDA of $200m, but for the EBITDA hurdles, let’s pretend it was $0. It won’t matter.

According to the comp plan, EBITDA and market cap hurdles will be adjusted by a committee in proportionality, to preserve the economics of the award, based on the stock consideration of the purchase.

The reason is that, on the surface, they don’t want to reward him for buying market caps and EBITDAs, while the company’s dilution is paying for the reward.

So let’s look at this in isolation. What would happen if GME, using their current financials, bought eBay back in 2016? And that’s all they did.

ebay’s EBITDA was $3b.

Half stock. Half cash.

The hurdles should each be adjusted upwards by 50% of eBay’s EBITDA.

Currently, the hurdles are $2b. They would be lifted to $3.5b. The market cap hurdle goes up by $28b.

To clear all 9 tranches, cumulative EBITDA must hit $31.5b and market cap of $138b. eBay alone would have basically cleared all 9 EBITDA hurdles.

Combining eBay and GME market caps, they would hit a $64b market cap, clearing 3 hurdles ($40b, $50b, and $60b with the $30b adjustment).

If you combine the two entities together @ $64b market cap, the share price would be $36.47.

RC would have gotten paid $2.12b.

I hope you can appreciate that. If GME bought eBay back in 2016, under RC’s comp plan, he would have gotten paid almost 4 times all executive pay at eBay, combined, for the same exact outcome.

I don’t think he has the ability, yet, to buy eBay. The financing requires GME to remain investment grade, which they will not (9x leverage ratio is not even close).

I believe there is something up his sleeve.

However, this is a fairly brutal apples to apples comparison.

The only assumption being made is on the committee adjustment for the market cap and EBITDA hurdle. My assumption is that they will adjust directly proportional to the stock consideration. I don’t think there is a scenario where they make a math adjustment in the opposite direction that is less favorable to RC.

Even if he only cleared two hurdles, he would have gotten paid more than all eBay executives combined. Without doing one single thing different than eBay did in the past 10 years.

EDIT: to respond to the comments about him having to put up money to receive his shares, he most definitely does not. He can convert, like all other performance based options or RSUs, net of cash.

“Mr. Cohen may pay the exercise price of the Options (i) in cash or cash equivalents, (ii) subject to Mr. Cohen providing the Company with at least ninety days’ notice, through net exercise, or (iii) if permitted by law, by selling a sufficient number of Shares via a sell-to-cover arrangement or a broker-assisted sale…”

I created a model for the "buying eBay" scenario for the people who are melting down. Here is the link. Disclaimer: I do not think the eBay deal has even a remote possibility of closing, anywhere near current prices. But included it in the model, because of the melting down.

**Note - We do not know the adjustment formula for the EBITDA and market cap hurdles, in the event of the acquisition. However, we know that the committee is going to do so proportionally to the economic opportunity. Translation -- if a portion cash or debt is used, it will not effect the hurdles. by that portion. That is my assumption in this model. EBITDA and market cap hurdles will be adjusted when stock is used as consideration. I modeled it based on the price of GME at the time of acquisition.

TL;DR up front: This is a mechanical model, not a prediction. It assumes the real $125/share, 50/50 cash-stock eBay bid goes through, and it rests on two things the award agreement does not spell out: (1) how the Committee adjusts the hurdles for a stock-funded deal - the plan only says "equitably and proportionately as determined by the Committee… to preserve the economic opportunity," with no formula - and (2) an assumed ~$1.7B/yr eBay EBITDA contribution. Change those and the numbers move.

The setup

The award is 171,537,327 options, $20.66 strike, nine tranches. Each tranche needs both a market-cap hurdle AND a cumulative Performance EBITDA hurdle ($20B/$2B at tranche 1, scaling to $100B/$10B at tranche 9). No salary, no time vesting - if the hurdles don't clear <10 years, he gets nothing.

A stock-funded acquisition triggers the adjustment clause, which raises "the Performance Hurdles" (defined to mean both legs together). My read:

• Market-cap hurdles: flat +$26.7B each (the stock consideration), since market cap is point-in-time.
• EBITDA hurdles: cumulative — +~$0.81B × tranche number, because the EBITDA metric is itself cumulative. So the top EBITDA hurdle rises from $10B to ~$17.3B.

Why two prices matter

The eBay deal pays ~$26.7B in GME stock. How many new shares that creates depends entirely on GME's price when the deal closes. Issue at $25 → ~1.07B new shares. Issue at $60 → ~444M new shares. So the acquisition price sets the dilution, and then the post-acquisition price is what has to climb to clear the (now-raised) hurdles.

The payouts (all net of the ~$3.54B strike cost he pays to exercise)

Each row: deal closes at the acquisition price → GME has to reach the post-acq price to clear all nine → RC's net payout.

This table does not include the EBITDA hurdles. It's not just automatic. The EBITDA hurdles are not small. They will be reset on acquisition to a cumulative hurdle of $17b+ for the final hurdle, if stock + cash assumptions are correct.

The counterintuitive part

A higher acquisition price means fewer shares issued, which means a higher post-acq price is required to clear the same hurdles (fewer shares, so each one has to carry more market cap). But it also means a bigger net payout to RC, because he's exercising the same 171.5M options at a higher share price against a fixed $20.66 strike. So less dilution to existing holders ≠ smaller payout to him — the opposite.

The thing worth chewing on: the EBITDA leg. Because the EBITDA hurdle adjusts up cumulatively for the stock-funded deal, bolting on eBay's earnings does not hand him a cheap path — the bar rises by roughly what he acquired. To fully vest he still needs ~$17B of cumulative Performance EBITDA, most of which has to be created value (synergies, growth), not just eBay's standalone baseline. The deal makes the market-cap leg reachable; it does much less for the EBITDA leg.

Caveats, again, because they matter:

• The adjustment formulas are my reconstruction — the plan gives the Committee discretion, not a formula.
• eBay EBITDA is an assumption.
• Market cap is measured on a 60-trading-day average in the actual plan; I modeled it as spot.
• This shows what the comp math does if the market values GME+eBay at these caps. It does not say the market will.

Not financial advice. Just running the mechanics.

Taking a stock from $22 to $141 in <10 years is practically impossible, especially from the distressed starting point.

I understand that he is talking from both sides of his mouth: criticizing eBay's board for risk free compensation, but at the same time, he is lobbying for high upside, low downside compensation that is 10-100x the amount the eBay CEO would make in the same time period. I do not have a great answer for that one. Warren Buffet owned 33% of Berkshire, he is asking for 25% if he completely smashes it. Worth it? You decide.

He is basically asking to share in the upside if he outperforms the entire S&P500. There is no way for him to game it. If he does not do that, he gets paid minorly or nothing.

Tomorrow.

There is so much misinformation about Ryan Cohen's comp plan. I read it almost every single day.

Here are some facts.

#1 - If GME buys a company, it does not help him achieve the market cap and EBITDA hurdles. There will be a Compensation Committee that will adjust the hurdles accordingly. From the plan:

“The Performance Hurdles will be adjusted by the Committee equitably and proportionately…
(a) higher to account for acquisition activity for which stock is provided as consideration…”

#2 - The compensation is in the form of options. This is by far the most important piece. The award is based on the STOCK PRICE, against a strike price of $20.66 -- close to where we are at right now. He can try to game it all he wants, but unless shareholders benefit, it doesn't help him. Unless stock price sky rockets, dilution effect is minimal, as is his compensation.

#3 - The market cap cannot be gamed short term. It requires a 60 day average over the price.

#4 - The options expire in 10 years.

Therefore, there is no way for him to game this. If he buys eBay, then the market cap and EBITDA hurdles jump proportionally. Right now, as it stands, the final EBITDA hurdle is $10b and $100b MC. If they buy eBay, it will be $13b and $150b.

I don't see any holes. The strike price, by itself, should be enough. The reason it is not is because Cohen is quite literally saying that, even if we can game this through share buy backs and Roaring Kitty meme posts, he does not get one dollar. (EBITDA hurdles). And he cannot game those, because they get reset.

Do you not appreciate how challenging this is? Tell me how many companies have 10x'd their EBITDA and market cap in the S&P 500 in the past decade. The answer is around 8. Total. Out of 500 of the best performing companies in the United States of America. 2% of companies. But you are complaining about how much it will cost you to pay the man who does it? Even though he will have done what only 2% of companies can do.

Worth noting: a $10b EBITDA growing at that rate will easily attain a 40 P/E ratio. That hurdle is enormous and eye popping. Consider SHOP stock @ $136b valuation and $1.78b EBITDA. 54.64 P/E ratio.

Occam's Razor

He isn't buying eBay, yet.

The financing provision will not allow it because of the indirect, but very direct, requirement of debt to equity ratios below 3, as stated by Moody's themselves.

He doesn't have the money or equity - the eBay shareholders and the board will not even allow it. Also, we do not want it yet. The financing would put us in the same exact position pre-2024 squeeze.

There is something behind the curtain. He knew 100% this would get rejected. He planned for the show. He knew it would crunch the price. He did this all right before the vote for his package. Why?

He is patient and stacking the deck. eBay is still the target. They have close to 100% share in the collectibles market. He is entering a space they have dominated for 20 years. It's also their fastest growing channel.

Power Packs has the infrastructure to compete head on, as a marketplace. PSA is on the board and own a lot of collectibles. There is a partnership there, in which the logical next step is to create a marketplace. The marketplace could provide $5b in GMV overnight.

If I had to bet, GME will start a long term buyback program initially to put pressure on short positions and receive the cash back from the warrants. They will buy PSA in cash. They will launch a collectibles marketplace. And they will start accumulating depressed retailers.

They will let eBay sit on ice as they grab market share from them, increase their market cap, and half cash and half stock will become very obvious to the shareholders @ a $60b market cap. But it will years of time.

Tomorrow. Well... July 7th. But tomorrow.

It’s been almost a year now since GameStop’s beta release of Power Packs.

October of 2024, the GameStop and PSA partnership evolved to the level that made Power Packs’ capabilities possible.

That means it only took 8-9 months to develop the entire site and release it.

It was an MVP. As far as I know, there haven’t really been any updates to the site since the beta launch, let alone the public one a month ago. But they built the entire thing in less time than they could make any significant updates?

PSA partnership, Power Packs launches, no other updates happen, GameStop offers to buy another collectibles marketplace?

Something fishy is going on here. He built some minor collectibles gambling tool, but alludes to wanting to buy eBay for the last 3 years? He just built .01% of eBay for funsies, but planned on buying the company 1,000x the size that can swallow those capabilities? The platform also just so happens to require the technology that can expand into a full digital marketplace for the company that they have been rumored to be buying, from a guy who sits in the board, who takes zero pay or equity? 🤨🤔🧐

GameStop has the potential to be the consumer marketplace for PSA. All of their collectibles, auth, etc. The damn CEO is on the board of GME.

Billions in GMV, right out of the gate.

GameStop is buying PSA contingent on RC’s pay package. Thats what is happening.

Power Packs is a Trojan horse. eBay is the Kansas City shuffle.

Tomorrow.

Why are there 100+ software engineers, including 20+ front end engineers and a handful of product engineers at GameStop? It’s 2026, the capacity of these engineers is immense. Especially if they are relentless and working for an ambitious, efficient CEO with an owner’s mentality.

I was looking at all of their engineers on LI, their history, and what their bullets say they are working on.

It makes me wonder what they are all doing. There is zero chance that they are all working on GameStop’s little e-commerce store or Power Packs. Those markets are fairly tiny and there haven’t been major releases on that technology that make sense for 100+ relentless engineers.

With RC’s past as a marketplace builder and Power Packs as the framework to build something much larger, there is a chance that this is just a press tour for a product launch, disguised as M&A activity.

Is he building an eBay competitor?

They can solve the classic chicken and egg problem already because they are already in the business. They can use their cash to provide marketplace liquidity with a Buy it Now button from GameStop themselves. Power Packs sort of looks like Trojan Horse infrastructure for a much bigger play.

Obviously, if you have 30-40 engineers working on this, something might leak eventually. But Apple has been doing this for 20 years without any leaks. And RC is Apple’s biggest fan girl.

One of the most telling parts of this story is Teddy. So far we have only thought of it as a holding company. The trademark is for an online marketplace that sells goods and services. You’re telling me he went through all that with the Canadian trademark, getting the books off the ground, etc. because he is a billionaire that felt like making an extra few thousands of dollars.

Perhaps it’s that simple. He is taking the fight straight to the competition, head on. Not by launching the marketplace first, but letting them know their mistakes and how he plans on fixing them. Taunting them just to hear the haters’ responses. And most importantly, building a massive amplification system.

Live commerce, low SG&A, local logistics, country wide authentication, simple vaulting process, etc etc.

This makes much more sense to me than buying eBay. Not that buying eBay wouldn’t help the cause or that he doesn’t want to. The deal mechanics do not work yet. He knows that. And he is sort of acting like he has an ace up his sleeve.

They also have VFX artists that are working there. Thus far, we have seen a total of 2-3 videos of output from them. What are those guys doing?

For a guy that touts relentlessness, efficiency, and challenging the status quo, my bet is that something much bigger is coming.

That’s why the board agreed to a major compensation package for him. It’s not like the board is full of bozos that worship RC. There’s 3 basically billionaires on there. You want me to believe that they are just giving him everything he wants with 0 accountability to the shareholders or even their own personal interests?

I would imagine if anything like this is coming, it’s coming after the comp plan and issuances are voted on.

Also, I read so many posts lately about RK being mad about dilution and jumping ship, but he literally cheers’d everyone on livestream about the share offering.

Tomorrow.

“Success story”

Starting a beverage company is hard.

Beverage is hard to ship. It’s costly. Extremely.

There’s no margin until you hit peak scale.

There are billions of beverages. Yours is probably dumb.

Mine is probably dumb too.

I spent 3 years building one and finally launched. I can’t tell you how hard it is to try and make something healthy that competes with Gatorade and doesn’t cost a billion dollars and still tastes awesome.

It cost more money than I had ever expected. And far more energy than I could have dreamed.

Naive thought: Gatorade is bad for you. Everyone knows. Making a competitor can’t be that hard.

Truth: nobody gives a flaming butt hole that you started a beverage company. Nobody.

Pepsi is already there. That’s their edge. They are already there. They consume most of the water supply at the manufacturers, they occupy shelves on shelves of space, they own the stadium deals, they own the government, the schools, the convenience stores. They own the athletes and the influencers and the logistics and the distribution.

If not them, their rival Coca Cola owns the other half.

You can’t beat them.

Some other people asked me to dox / plug my company in threads before.

It’s called Battle Juice. I don’t know if plugging is against the rules.

I am jumped out the plane with no chute kind of all in.

Wish me luck 🙏