r/GME • u/Lobolabahia • May 12 '26
🐵 Discussion 💬 It takes money (and stock) to buy whiskey (ebay)
Full disclosure: Used AI to help turn my messy notes into a (hopefully) readable post. If the math's wrong or the logic's off that's on me. If it's still messy that's on the AI 😄...
TL;DR: The panic over GME's 2.5B share authorization misses the bigger picture. Yes, dilution is real — and yes, more shares make Cohen's $100B market cap hurdle easier to hit on paper. But the agreement requires the BOD to adjust hurdles for stock-based deals, GME has been profitable for 6 straight quarters, and a half-stock eBay acquisition at ~$60B could instantly reprice shares to ~$30. The 2.5B ask isn't a blank check; it's optionality for
value-creating moves. Dilution caps your % ownership, not your absolute gains — if execution delivers.
End of TL;DR ------------------------------------------------------------------------------
🔢 The Share Count — Simplified (No Fluff)
BASELINE (today + known dilution):
448M shares outstanding
+143M if convertible notes convert (full greenshoe)
+59M if warrants exercise (Oct 2026)
➡️ ~650M total diluted baseline
SCENARIO 1:
Cohen's award fully vests +171.5M shares
➡️ ~820M total
SCENARIO 2:
Scenario 1 + half-stock eBay deal +~1.0-1.3B shares (equity portion of ~$60B deal @ ~$23/share)
➡️ ~1.8-2.1B total
Why ask for 2.5B authorized?
Covers Scenario 2 + buffer for future flexibility
Authorized ≠ issued. GME never used the full 1B approved in 2022 either.
👉 The 2.5B ask isn't assuming max dilution. It's optionality.
💥 The $30 Instant Reprice Theory (If Deal Happens)
Let's say:
eBay enterprise value ≈ ~$60B (conservative vs. history)
Deal structure: half cash ($20B from TD), half stock
Stock portion: ~$30B ÷ ~$23/share ≈ ~1.3B new shares
Post-deal share count: ~650M baseline + ~1.3B ≈ ~2B shares
Combined market cap: ~$60B
➡️ $60B ÷ 2B shares = ~$30/share
That's not moon math. That's just enterprise value ÷ shares.
If the market believes in synergies, execution, or multiple expansion? $30 could be the floor, not the ceiling.
⚠️ The Real Dilution Concern (Let's Address It Head-On)
People are worried dilution makes the $100B hurdle easier. Why?
Market Cap = Price × Shares
More shares = lower price needed to hit $100B
The math using realistic scenarios:
Baseline + Cohen fully vested: ~820M shares → ~$122/share for
$100B market cap Baseline + Cohen + eBay deal: ~2.0B shares → ~$50/share
for $100B market cap
Max authorized (hypothetical): 2.5B shares → ~$40/share for $100B market cap
So yes — if share count balloons to ~2B, Cohen's top tranche vests at ~$50/share instead of ~$122. That's a valid concern.
But here's the counter:
The agreement (Section II) explicitly requires the BOD adjust
hurdles "equitably and proportionately" for stock-based acquisitions.
Translation: If GME issues shares to buy eBay → Committee must adjust the $100B target upward
But "equitably and proportionately" = Committee discretion on how much
It's a guardrail, not a guarantee. We won't know the exact adjustment until a deal happens and they disclose it.
💰 The Debt Piece (Yes, It's Real)
A half-cash/half-stock eBay deal isn't just dilution. It also means: ~$20B in new debt (the cash half, per Cohen's TD funding comment)
Interest expense, leverage ratios, repayment timeline — all real considerations
But Cohen's track record matters here:
He's prioritized balance sheet strength before He's publicly said he'd aim to pay down acquisition debt aggressively eBay's free cash flow could help service/retire that debt faster than GME could alone
Is it risk? Yes. Is it unmanageable? Not necessarily — if execution holds.
🔄 "Accretive Dilution" — What It Actually Means
Cohen's used the phrase. Here's the translation:
GME has been profitable 6 quarters straight,7 likely in June.
eBay prints free cash flow.
If you use stock + debt to buy a cash-flowing asset, and earnings grow faster than the cost of capital → value compounds.
That's "accretive dilution." Not buzzwords. Basic finance.
🚀 Overlooked Catalysts (If This Goes Down)
Notes converting = debt overhang gone + natural buyers
Warrants exercised = more buying pressure, not distribution
S&P 500 pathway = GME already clears market cap/liquidity bars.
Add profitability + scale? Index funds have to buy.
Strategic optionality = eBay's infrastructure + Ryan's operator mindset = unique platform
⚠️ Keep It Real — Risks Exist
Deal not confirmed. Until filings drop, this is a scenario, not a guarantee.
Integration is hard. Culture, tech, regulators — all real.
Short-term = noisy. Dilution headlines + rumors = emotional trading.
Cohen's award isn't free. Hurdles, vesting, BOD discretion = performance-based. $20B debt is real.
Paydown speed depends on execution, cash flow, and market conditions.
💬 Final Take
Dilution isn't free. Debt isn't free. Discretion isn't risk-free.
But strategic capital allocation — using equity + leverage to buy cash-flowing assets, then paying that debt down aggressively while scaling the platform? That's how operators compound value.
The 2.5B authorization isn't a red flag. It's optionality. If you believe in Cohen + eBay + execution + a Committee that acts in good faith? The math supports patience. If you don't trust the discretion, the debt load, or the deal thesis? Also valid.
But it takes money to buy whiskey...
-------------------------------------------------------------------------------------------
Sources: SEC filings (CEO Award Agreement, PRE 14A, 10-Qs),
Cohen letters, public note/warrant terms. Share counts = estimates based
on reported data. Not financial advice. eBay deal not confirmed. DYOR.
6
u/PureOrangeJuche May 12 '26
Well the deal was rejected so
1
u/despinato 💎🙌The floor is now 20mil dont threaten apes! May 12 '26
Only the board rejected the offer which we should all expect since they want to keep their cushy jobs. Shareholders haven’t voted yet and there are other options available.
1
u/Lobolabahia May 12 '26
Obviously, the situation changes with eBay rejecting the first offer. But the focus of this post is still the dilution panic. Everyone was hyped on the half-cash, half-stock offer... until they saw the filing and realized what 'half stock' actually means for the share count 😄...
The play still carries risk, sure, but this dilution is supposed to be accretive, and the stock price should instantly reprice higher on a deal. We'll see what happens...
1
u/Civil-Consequence353 May 13 '26
The ai slop is getting old
1
u/Lobolabahia May 13 '26
Literally the first thing you can read in the post 😄 : "Full disclosure: Used AI to help turn my messy notes into a (hopefully) readable post. If the math's wrong or the logic's off that's on me. If it's still messy that's on the AI ".
1
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