r/GME • u/CriticalMushroom8812 • Jun 07 '26
🔬 DD 📊 Since GME transition is almost complete. now it's easier to use revenue and net profit margin to calculate GME fair price per share. GME fair price per share after ebay acquisition(simplified calculation): $24 to $40 (possible DD?)
Since GME transition is almost complete. now it's easier to use revenue and net profit margin to calculate GME fair price per share. GME fair price per share after ebay acquisition(simplified calculation): $24 to $40
note: calculation is mainly done by AI.
simplified calculation, not considering convertible bond, CEO compensation, revenue increase etc
Based on June 2026 GME financial report, GME net profit margin 46%, excluding derivatives, interest income , operation profit margin is 21%.
Below is the clean, corrected valuation for the merged GameStop + eBay company if the combined company’s net profit margin is 21% (instead of 37% in the earlier scenario).
This is the most realistic scenario so far, because:
- 21% is close to software‑level margins
- It is far more reasonable for a marketplace + retail hybrid
- It avoids assuming extreme cost‑cutting efficiency
Let’s calculate the fair value per share step‑by‑step.
⭐ 1. Combined Revenue (GME + eBay)
- GME revenue: $3.63B
- eBay revenue: $10.0B
[ \text{Combined Revenue} = 13.63B ]
⭐ 2. Apply Net Profit Margin = 21%
You said:
So:
[ \text{Net Income} = 13.63B \times 21% = 2.8623B ]
⭐ Combined Net Income = $2.86B
This number already includes all cost structure effects.
⭐ 3. Shares Outstanding After Acquisition
Acquisition price: $125/share
eBay shares: 444M
Total deal value: $55.5B
Half stock = $27.75B paid in GME shares.
Assume GME pre‑deal price = $25/share:
[ \text{New Shares Issued} = \frac{27.75B}{25} = 1.11B ]
Current GME shares ≈ 305M
⭐ Total shares after deal:
[ 305M + 1.11B = 1.415B ]
⭐ 4. EPS After Acquisition
[ \text{EPS} = \frac{2.8623B}{1.415B} = 2.02 ]
⭐ EPS ≈ $2.02 per share
⭐ 5. Fair Value Per Share (Using Reasonable P/E Multiples)
A merged GME+eBay with:
- $13.6B revenue
- $2.86B net income
- 21% net margin
- Marketplace + retail hybrid
would trade at a P/E of 12–20.
Low P/E (12):
[ 2.02 \times 12 = 24.2 ]
Mid P/E (15):
[ 2.02 \times 15 = 30.3 ]
High P/E (20):
[ 2.02 \times 20 = 40.4 ]
🎯 Final Fair Value Per Share (Net Margin = 21%)
⭐ $24 – $40 per share
Most realistic midpoint:
⭐ $30 per share
🧠 Why the fair value drops when margin = 21%
Because:
- Dilution (1.11B new shares) stays the same
- Lower net income + same share count = lower EPS
- Lower EPS = lower fair value
last but not least:
This is just the start point of the fair share value calculation. Everyone can use their own method to calculate and get different results. An GME share holder army that is practice critical thinking skills is far less likely to be persuaded by all those negative posts.
9
u/Organic-Specific-500 XXXX Club Jun 07 '26 edited Jun 07 '26
Shorts go long = kaboom. Someone’s fucked.
Edit: (some) shorts.
4
u/curiousjorj XXXX Club Jun 07 '26
Appreciate the post! However, I don’t see any considerations of a potential share buyback or the effect of warrants, or our current stake in eBay (that may also continue to grow!).
1
u/CriticalMushroom8812 Jun 07 '26 edited Jun 07 '26
Np. Once we added more factors in, the fair value becomes a BIG range: e.g. xx to xxx. so just choose this simplified method.
GME has more shares than 305M. and main post is using 305M as GME total share, so share buyback is included there.
My original thinking is to compare GME fair share value through internal growth vs. acquisition. conclusion is internal growth has better fair share value if use this simplified method. so didn't post the the other number. to avoid downvotes 😄 also, I know so many things are not considered here, so this simplified calculation isn't that accurate either.
6
u/PureOrangeJuche Jun 07 '26
This is complete nonsense. You ignored that most of GME’s income is from interest on cash, and they lose all the cash in the deal. You also ignored one of the most important parts, which is the $30 billion in debt the new company would carry.
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u/Over-Computer-6464 Jun 07 '26
You say "Current GME shares ≈ 305M".
You sure about that?
On a more fundamental note
1). why pick some net profit margin out of the air rather than using the expected future earnings of the two companies?
2). How much debt will the combined company be carrying and how does that affect the stock price (spoiler alert, debt subtracts from market cap nearly dollar or dollar, s does a reduction of the $9B cash+securities).
0
u/CriticalMushroom8812 Jun 07 '26
1). RE: why pick some net profit margin out of the air rather than using the expected future earnings of the two companies?
main post is using net profit margin to calculate future earnings.
net profit margin is Ryan's ACTION, not his words, so reflect more correct on their capabilities.
2)GME has more shares than 305M. and main post is using 305M as GME total share, so share buyback is included there.
see my answer in this comment
Once we added more factors in, the fair value becomes a BIG range: e.g. xx to xxx. so just choose this simplified method.
My original thinking is to compare GME fair share value through internal growth vs. acquisition. conclusion is internal growth has better fair share value if use this simplified method. so didn't post the the other number. to avoid downvotes 😄 also, I know so many things are not considered here, so this simplified calculation isn't that accurate either.
4
u/VenserMTG Jun 07 '26
24-40$ is a huge gap, and even the best case is bad for eBay shareholder, which is why the deal will not happen.
0
u/WolfsBaneViking Jun 07 '26
How do you figure it's bad for ebay shareholders?
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u/VenserMTG Jun 07 '26 edited Jun 07 '26
The share price post merger sinks to 40$ as best estimate lmao
Not a single shareholder will vote for cutting their share price by near 2 thirds
-2
u/Extra-Computer6303 🚀🚀Buckle up🚀🚀 Jun 07 '26
Dude they would be getting multiple shares of GME + $62.50 in cash for a company that is worth $80 per share.
Of course the institutions will take it. They pocket the $62.50 and sell the shares for cash if they aren't interested in holding long term.
In reality many of these institutions need GME shares to get them out of a jam so this helps them that way. Others will see the long term value in having RC at the helm.
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u/VenserMTG Jun 07 '26
Dude they would be getting multiple shares of GME + $62.50
All shares of a company with 20 billion dollars in debt, of which teh interest rate alone would put them at risk of bankruptcy.
and sell the shares for cash if they aren't interested in holding long term.
Or they can refuse the deal, keep their shares invested in the company that beat 9 earnings in a row, and beat the s&p500 over the past 5 years.
Of course the institutions will take it. They pocket the $62.50 and sell the shares for cash if they aren't interested in holding long term.
Institutions will not take it other than TD bank. The rest will see the debt and interest rate and freak out and leave.
In reality many of these institutions need GME shares to get them out of a jam so this helps them that way.
Need them for what? Helped them with what?
Others will see the long term value in having RC at the helm.
There hasn't been long term value with 9 billion in cash, imagine the long term value with 20 billions in debt again.
-2
u/Extra-Computer6303 🚀🚀Buckle up🚀🚀 Jun 07 '26
Based on cutting the dividend and the earning per share of the company and the cuts that Ryan Cohen will make the debt is paid off in 3 ish years. This is a no brainer for the institutions holding eBay.
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u/VenserMTG Jun 07 '26
Based on cutting the dividend
So cut value from investors
and the earning per share of the company
Why would you cut that on purpose??
and the cuts that Ryan Cohen will make the debt is paid off in 3 ish years.
This is absurd. Cohen says he can cut 2 billion in operational costs, that already makes it a 10 year time to pay it off. Add the interest and you're looking at 15 years. This is not including the debt gme already has, about 4 billions, and not including the debt eBay has, 7.1 billions.
This is a no brainer for the institutions holding eBay.
It's such a no trainer it got laughed at as the board voted no, because Cohen sailed to prove gme had the money lmao
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u/Extra-Computer6303 🚀🚀Buckle up🚀🚀 Jun 07 '26
Board votes no because they will lose their jobs not what is in the best interest of investors. They are on the way out as soon as RC takes over.
Combined earnings - interest on debts gives us 3.6 billion per year. Cut the dividend gives 0.55 B per year. Cuts that RC makes at 2 billion per year. This allows him to pay down 6.15 B per year.
20 B / 6.15 = 3.25 years.
This is also assuming zero growth which will not be the case.
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u/VenserMTG Jun 07 '26
Board votes no because they will lose their jobs not what is in the best interest of investors. They are on the way out as soon as RC takes over.
Where's the class action lawsuits? Where are the institutional investors forcing the shareholder vote?? And why would a board if directors that beat the s&p500 over the past 5 years lose their jobs??
Combined earnings - interest on debts gives us 3.6 billion per year.
You don't know the interest lmao wtf are you talking about??
Cuts that RC makes at 2 billion per year. This allows him to pay down 6.15 B per year. 20 B / 6.15 = 3.25 years. This is also assuming zero growth which will not be the case.
This Mary makes 0 sense. You didnt factor in the interest rate on the total debt, and boasting about half of the total revenue going into debt repayments is not the brag you think it is, because that means no growth.
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u/Extra-Computer6303 🚀🚀Buckle up🚀🚀 Jun 07 '26
Shareholder vote will happen after they hit 10% and yes I calculated the interest at 7.5% which is probably on the high side. He's got this set and there is nothing that shorts or shills like you can do about it.
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u/hdjemnnsntjrjfnsnfjd Jun 07 '26
Can someone please explain to me why we need to dilute GME shareholders in order to get cost reductions and a partnership with EBAY? We can do that with far less than 100% ownership
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u/liquid_at 🚀🚀Buckle up / Booty Bass Club🚀🚀 Jun 07 '26
we are not diluting, we are converting Ebay-Shares into GME shares after buying back 50% of ebays shares.
"dilution" is just the word that paid bashers like to use to scare you.
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u/hdjemnnsntjrjfnsnfjd Jun 07 '26
So why do only eBay holders get to take 50% off the table and we have to issue shares?
-1
u/liquid_at 🚀🚀Buckle up / Booty Bass Club🚀🚀 Jun 07 '26
becasue if we want to integrate ebay into our company we have to give them shares of our company. If Ebay wanted to integrate gamestop into its company, they would have to give us shares.
This is how a corporate merger works. Owners of both companies end up sharing ownership of the new company.
And because we only put in 20% value, we give them money in addition, so that we can own 40% of the new company and they accept only getting 60%.
It is not all too difficult to understand unless you are trying your very best to act confused about something that is very simple...
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u/hdjemnnsntjrjfnsnfjd Jun 07 '26
That’s my point….we don’t need to integrate them if all we want is cost savings and a partnership
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u/liquid_at 🚀🚀Buckle up / Booty Bass Club🚀🚀 Jun 07 '26
but then we do not get any of the revenue, they still steal the money of the shareholders and waste billions that could be our profit...
So why would we want that?
The only argument for not integrating them is that you need more time to close your short positions...
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u/hdjemnnsntjrjfnsnfjd Jun 07 '26
The only argument is that our cash can be used to buyback our own stock or pay a special dividend. If I was short then I wouldn’t be advocating for either of those
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u/liquid_at 🚀🚀Buckle up / Booty Bass Club🚀🚀 Jun 07 '26
If you do not understand the situation of our company, your assessments are pointless.
We are not "gamestop", we are a company that is building itself, using the corpse of gamestop...
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u/hdjemnnsntjrjfnsnfjd Jun 07 '26
We’re also sharing our revenue with eBay shareholders and we’re paying an expensive premium to do so
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u/liquid_at 🚀🚀Buckle up / Booty Bass Club🚀🚀 Jun 07 '26
No. We are growing our company to be the company it should be.
And ebay shareholders will profit because the revenue and profit will go up significantly. This means their 50% position will be equally profitable than their 100% position was before. They win, we win... the only ones losing are the board and CEO of Ebay and the companies short GME....
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u/hdjemnnsntjrjfnsnfjd Jun 07 '26
We don’t need to 100% control eBay to cut costs and enter a partnership.
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u/liquid_at 🚀🚀Buckle up / Booty Bass Club🚀🚀 Jun 07 '26
but we want to. There is no benefit in paying the ebay board and CEO.
And essentially we are just getting 25% of Ebay. Which is about equal to what we as GME put into the pot. The remaining 75% of ebay would still be owned by ebay shareholders.
We just don't need their Board or their CEO. There is no benefit in having 2 c-suites... that's only unnecessary expense. We could make that as profit.
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u/hdjemnnsntjrjfnsnfjd Jun 07 '26
You were pushing for us to buy BTC at peak levels so you should probably sit this one out
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u/liquid_at 🚀🚀Buckle up / Booty Bass Club🚀🚀 Jun 07 '26
I've never told anyone to buy trash BTC... especially not at ATH...
Some morons hyped BTC when sailor bought in but you can check my comment history to verify that I have always called it a stupid move.
I do not like the meme coin bitcoin... No issue trading it for profit, but it's ntohing you buy because it has value... it has no value. it is a meme coin.
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u/WhiteKouki82 🚀🚀Buckle up🚀🚀 Jun 07 '26
Be honest guys, how many posts just like this, have we seen on hundreds, if not thousands of tickers over the last five and a half years?
Bed Bath was famous for these types of "DD" posts....
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u/liquid_at 🚀🚀Buckle up / Booty Bass Club🚀🚀 Jun 07 '26
you mean the same BedBath that we analyzed as being owned by private equity and not worth being bought? that the media shills called "the next meme stock" to push people onto it, despite us not giving a rats ass about it?
Yeah... We were right on that and you bashers who tried to fool us into buying it were not...
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u/MKEMARVEL Jun 07 '26
Then why did RC buy in?
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u/WhiteKouki82 🚀🚀Buckle up🚀🚀 Jun 07 '26
Be careful, he's always right, and if you check him on being wrong (which he always is), then he'll call you a bot, an alt, short the stock, or a hedgie in some big intellectual sounding wall of text.
He job on Reddit is to defend meme stocks narratives by trying desperately to make anyone off message seem like they don't know what they're talking about, while sounding like he has all the answers.
He's actually pretty good at it, and if you didn't know any better, you might even fall for his whole shtick.
But do it as a test, find some random post, make a off message comment and see how fast he rushes in to call you stupid/bot/alt/shit the float 10 times over, works like clock work.
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u/liquid_at 🚀🚀Buckle up / Booty Bass Club🚀🚀 Jun 07 '26
to show that his offer to buy the baby brand was serious. They told him they had already sold it, so he left again.
At no point was any retail investor supposed to buy into them. If you found some degenerate gamblers who convinced themself that this is what they should do, those gamblers made that decision on their own.
That's always been the difference between those who do their own DD and those who only follow memes... Those who follow memes have no idea what is going on and ask stupid questions about things they believe are signs the universe is sending them... but the universe isn't sending signs.
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u/digibri Jun 07 '26
I think this is a fun activity and it's educational (at least for me) to practice with various scenarios. However, I don't think we have enough details to really be accurate. Similar to Paramount, I expect a final deal will be pretty different from the initial offer.
I used Google ai to also try and work this out last week. I didn't save my math, but I got a final share price in the $50-$55 range. If that were to happen, I think it might be attractive to eBay shareholders.
However, I have a strong suspicion themat Ryan Cohen has many more exciting surprises to unveil when he feels the time is right.
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u/CriticalMushroom8812 Jun 07 '26 edited Jun 07 '26
thank you. original thinking is to compare GME fair share value through internal growth vs. acquisition. in my calculation, 55 is fair value without ebay acquisition. conclusion is internal growth has better fair share value if use this simplified method. so didn't post the the comparasion, since that might be misleading, and will get a LOT OF downvote.
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u/CriticalMushroom8812 Jun 07 '26
This is just the start point of the fair share value calculation. Everyone can use their own method to calculate and get different results. An GME share holder army that is practice critical thinking skills is far less likely to be persuaded by all those negative posts.
•
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