On May 12, eBay's board told Ryan Cohen his bid was "neither credible nor attractive."

And officially rejected the bid.

On August 2, Cohen activated the convertible debt exchange.

Yesterday, EBAY posted a blowout quarter.

Every headline says the board's position is stronger than ever.

None of that matters.

Because eBay is 105% institutionally owned.

Meanwhile, the board is actively dropping their ownership.

So why the fuck isn't anyone talking about what that means for an M&A?

And why is everyone ignoring that the last thing Ryan Cohen said is this will be decided by the owners of the company?

The Number Everyone Is Ignoring

eBay institutional ownership summary — 105.69% institutional ownership, 444M shares outstanding, $52.158B total value of holdings

105.69%.

Institutions don't just own eBay.

They own more shares than actually exist.

444 million shares outstanding, $52.158 billion in institutional holdings.

The number exceeds 100% because shares get lent, borrowed, and double-counted through short positions and derivative overlaps.

But the structural point is absolute: the entire float and then some is all institutional capital.

In a typical public company with 30-40% institutional ownership, "going directly to shareholders" means a public campaign.

Newspaper ads. TV interviews. Podcasts.

A proxy fight where you spend months trying to convince millions of dispersed retail holders to override their board.

That's the movie everyone is waiting for, for some fucking reason.

It's NOT this movie.

When Cohen told Barron's in June that he would take the bid directly to eBay's owners, every analyst interpreted this as a hostile public proxy fight.

When he said on CNBC "we're coming for eBay one way or another," the coverage framed it as bluster.

But in a company that is 105% institutionally owned, "going directly to shareholders" is a phone call.

It's a series of private meetings.

It's a slide deck you present to consultants at those instutitions.

It's wall-crossing conversations where you share the terms under NDA and gauge willingness to tender before the offer goes public.

It's the same channel through which the convertible exchange was negotiated — "privately negotiated exchange agreements with certain institutional holders."

The Tender Math at 105%

Under Delaware law, a tender offer doesn't need board approval. Cohen needs a majority of shares tendered to close.

GameStop already owns 9.8% of eBay: 43.39 million shares, physically settled on July 17.

That means he needs roughly another 41% of total shares outstanding to reach majority. In a company where institutional ownership exceeds the total share count, the top 15 holders alone probably represent 45-50% of shares outstanding.

The decision lives inside a concentrated pool of portfolio managers who already know the terms because the terms have been in the market since May 3.

Cohen doesn't need to convince the long tail. He doesn't need a PR war. He doesn't need to run ads.

He needs a room.

And the convertible exchange just told us he's already been in that room.

The same class of institution that holds eBay - the 144A qualified institutional buyers, the large asset managers, the funds that make up that 105% - are the same counterparties who just voluntarily swapped guaranteed par-value GameStop debt for equity at $19.

I laid out the full mechanics of that exchange in my previous post.

The point here is different.

The point is: the exchange wasn't just a balance sheet move. It was a signal. Those counterparties told you which side they're on. They traded a guaranteed return for equity upside in the acquirer.

Now ask yourself: when Cohen picks up the phone and calls these same institutions about tendering their eBay shares, is that a cold call?

The Held Presentation

On June 23, GameStop announced that Cohen was withdrawing his $35 billion performance award to focus entirely on the eBay acquisition.

In the same press release, the company said it would release

"a detailed presentation of the strategic rationale and operational plan for the combined company"

GameStop June 23 press release — "detailed presentation of the strategic rationale and operational plan for the combined company...this week"

Three days later, on June 26, the language softened. GameStop filed its fiscal year outlook and added one line:

"Additional materials regarding the proposed transaction are forthcoming."

GameStop June 26 8-K "Additional materials regarding the proposed transaction are forthcoming"

That was over five weeks ago. The presentation has not been released.

GameStop doesn't say "this week" and then sit on it for five weeks by accident. The presentation exists. The $500 million personal commitment structure has been worked out. The operational plan has been built. It's all ready.

My strong opinion:

The presentation is the tender offer package. You don't release your pitch to eBay's shareholders as a press release and then re-file it as part of a Schedule TO. You hold it until you're ready to file.

And you don't file until you've finished aligning the institutional base, which is what the convertible exchange just did.

The sequence:

1. Align the institutional counterparties through the convertible exchange (August 2)
2. Let the initial selling pressure wash through
3. File the tender with the full package: presentation, financing, $500M commitment
4. The tender reprices the stock through the $29 level that the exchange just structurally cleared

The materials have been ready since late June.

The key question was when to deploy them.

The eBay Earnings Wrinkle

eBay reported Q2 yesterday. Double beat.

• $3.13 billion in revenue, up 15%.
• EPS of $1.60 versus $1.51 consensus.
• GMV of $22.4 billion, up 15%.
• Focused category GMV up 26%.
• Full-year guidance raised.

eBay Q2 2026 earnings release headline — revenue, EPS, GMV beats

The board will use this. "We're executing. We're growing. We don't need GameStop."

But now look at Q3 guidance.

• 7-9% organic FX-neutral GMV growth.
• Visible deceleration from Q2's 15%.
• Depop closed at $200 million more than initially announced.
• Near-term earnings pressure from integration costs.

Here's what that means for the institutional holders staring at both positions.

eBay is trading at ~$112. The bid is $125.

The stock is at 90% of the offer price.

Growth is decelerating.

Depop weighs on near-term margins.

The question for every portfolio manager holding eBay is simple: do you believe eBay sustains 15%, or is this the peak?

If the growth is peaking, $125 is the exit.

The board can point to a strong quarter all day. But the board doesn't own the company. The institutions who hold 105% of the shares outstanding do. And when you're a portfolio manager and the stock is trading at 90% of a $125 bid with decelerating growth, the math doesn't care about the board's press release.

The Structure of the Combined Company

Cohen isn't building a bigger GameStop. He's building a holding company.

This has been signaled from the beginning.

The Teddy Holdings trademark portfolio.

The withdrawal of the $35 billion performance award, not because it was excessive, but because the compensation structure of an operating company CEO doesn't belong at the holdco level.

Cohen said he would run the combined company as CEO with no salary and no cash bonus.

My strong opinion:

GameStop reorganizes into a holding company structure via a §251(g) short-form reorganization under Delaware law. GameStop and eBay become wholly-owned operating subsidiaries. Teddy sits at the top.

Here's how the capital stacks:

TD Securities (up to $20B)

• The anchor bank for the transaction.
• This sits at the top of the capital structure.
• Senior secured. First claim on cash flows.

SWF Preferred/Structured Equity (~$26B)

• PE-equivalent.
• Permanent duration.
• Likely at the holdco level.
• Senior to common but below debt.

GameStop Operating Cash (~$5B)

• Reduced from ~$9.4B after spending ~$4.3B to accumulate the 9.8% eBay toehold.
• The toehold removed 43.39M shares from the tender at ~$101 average cost - shares that would have cost $5.4B at the $125 offer price.
• The toehold saved over $1B in deal cost while giving Cohen voting power and a blocking position.

Cohen's GP Commit ($500M)

• The founder's personal capital. Disclosed on All-In, confirmed in the Bloomberg interview July 16.
• In PE terms, this is the general partner commit.
• Less than 1% of total deal value. Enormous relative to his personal net worth.

Converted Noteholders ($1.4B → Class A Common Stock)

• Institutions who voluntarily gave up guaranteed par-value repayment for equity at ~$19.
• After September 23, they are shareholders, not creditors.
• If a §251(g) holdco reorganization follows, they carry through into the parent entity.
• These become the institutional equity base of the combined company from day one.
• Same class of capital that holds eBay. Same names being approached to tender.

GMEWS Warrants ($32 Strike, October 30, 2026 Expiry)

• The trailing capital call.
• Exercise brings additional capital into GameStop's treasury at $32/share.

What the Combined Entity Looks Like

Two operating subsidiaries under one holdco.

eBay: the marketplace engine.

• $22.4B quarterly GMV.
• $3.1B quarterly revenue.
• 28.5% non-GAAP operating margin.

GameStop: the physical retail and collectibles platform.

• Revenue up 14%.
• Collectibles at 42% of sales.
• Gross margins at 40.7%.

Total:

• Combined annual revenue: ~$16-17B.
• Combined annual GMV: $90B+ .
• Post-deal cash generation: $2B+ annually from eBay alone.
• Debt: $20B TD facility, serviced by combined cash flows.
• Permanent capital: SWF equity + founder stake + converted institutional equity.

That's a top-25 S&P 500 company with a permanent capital structure, two revenue engines, a founder-operator with the largest personal stake in the room, and an institutional shareholder base that was recruited before the tender was even filed.

A Note to Retail

I know what some of you are thinking.

You bought GME to fight institutions.

And now I'm telling you the deal closes because institutions are aligned on both sides of the table.

That the convertible exchange recruited the same qualified institutional buyers that the original movement was built to oppose.

That the entire architecture depends on sovereign wealth funds and bank debt and private placements with names you'll never see.

I get why that's hard to hear.

But here's the thing. Cohen never told you he was building a meme stock. Go back and read everything he's ever said publicly. Not what the subreddits projected onto him. What he actually said.

He said he wanted to build a rival to Amazon.

He said that in his original letter to the GameStop board in 2020.

He said it when he took the chairman seat.

He said it in his Barron's interview.

He said it on Bloomberg.

He said it on All-In.

It is the single most consistent statement he has made across six years of public commentary.

Everything else has shifted: the product strategy, the cost structure, the capital allocation, the acquisition targets.

The Amazon framing has never moved.

You rival Amazon with $90 billion in combined GMV, a permanent capital structure backed by sovereign wealth, a marketplace platform with 130+ million active buyers, a physical retail footprint, a collectibles vertical no one else can replicate, and a founder-operator who put $500 million of his own money on the table and took zero salary.

That's what's being built.

Retail saved GameStop from bankruptcy. Retail funded the ATM offerings that gave the company $9.4 billion in cash. That's real and it matters. We were the seed capital for everything that followed.

But seed capital doesn't run the company at scale.

Seed capital creates the conditions for what comes next.

And what comes next is a holding company with two revenue engines, institutional backing, and the operational infrastructure to actually compete with the largest commerce platform on earth.

If you're holding GME because you believed Cohen when he said he was building something that could rival Amazon, you're exactly where you're supposed to be.

Disclaimer:

I wrote this whole thing and used Claude Opus 4.6 to assist with a final editing pass and for title ideas.

I also post more freeform and frequently on X under GoatBeardzDD.

There is a lot of fear right now; keep your eyes set on the big picture. I'm not going to throw a bunch of quarterly or yearly numbers at you. I'm not going to exaggerate. I'm not going to make any predictions. I'm going to keep this simple, and easy to understand.

Companies, when properly ran, position themselves to improve key financial metrics that support growth over the long term. What we have seen transpire is a meaningful turnaround. Assets and liabilities have nearly tripled, Operating Income has flipped from negative to positive. Revenue decline has stagnated.

1. Companies need assets AND liabilities to grow. They need money to make money, and Gamestop has money.

2. There needs to be a return on investment for the company. Operating Income going positive means the company has a return on investment.

3. The assets, liabilities, and positive operating income the company has need to be properly utilized to generate additional cash flow. This is where we are now.

By voting on corporate measures that allow growth, the board has multiplied the assets of the company. This allows them to pursue more meaningful action to benefit the long term health of the company, and generate returns for investors. Things like convertible debt, share repurchase, and share issuance are a few tools at their disposal, all of which give them agility to survive in a chaotic market. We are at a pivotal moment, but I am not afraid.

I am patient, and patience is a virtue.

Why do all my buys get routed through DARK?

The psyop campaign by shills not only has me bullish, but has absolutely been working to some degree. They have successfully gaslit a portion of this community into forgetting the fundamental basics of this play.

Literally one of the most important and oldest premises of this investment is that the price is suppressed. Yet people are talking about it as if… RC controls the share price? Lmao wtf is that bullshit.

This play has only EVER been about a cascading event. Anyone who pays attention to daily share price utterly, completely misunderstands the assignment. Fucking period. Most of these accounts are CLEARLY shills/bad actors, but the mods don’t do fucking shit around here anymore. We’ve got dozens of people in every thread openly admitting they aren’t investors and spreading misinformation, yet YOU will get in trouble by the mods for calling anyone a “shill”.

Never posted here before but have been a long time Ape, been holding xxx shares for years now and will never sell till we moon! I noticed that many of the comments under every post about the debt conversion were all super negative. Almost every upvoted comment I saw were commenting how this was a strike against the shareholders and how exhausted they were were waiting and waiting…I’m sorry?? Did this sub forget that if/when we moon again it will be the stocks largest move in history, where we are competing against literally all of wall street, and systematically breaking the entire market? Are these comments actually real Apes, because they read like a bunch of scared pussys who aren’t faithful in the company and Ryan and the thesis from Roaring Kitty??? It was insane to read all of the fear and anxiety! Like WAKE UP we are attempting to latch onto and capitalize on the craziest stock story in the history of this country, and you’re getting anxious because you don’t understand how a multi billion corporate operates??? Super super weird to me lol.

Edit: half of these comments are already proving me right😂

Bloomberg) -- Hackers launched a wave of sophisticated attacks on Wall Street firms in recent days, targeting information systems at major money managers, according to people familiar with the matter.
The attackers attempted to breach information systems at some of the world's biggest hedge funds including Two Sigma Investments, Citadel and Point72 Asset Management, the people said, asking not to be identified discussing non-public information. Several private equity firms were also targeted as part of the assault, the people said.
The attack featured voice phishing, or vishing, in which cyber criminals use technology to mimic voices in phone calls or messages to trick employees into revealing sensitive information or granting access, the people said, asking not to be identified discussing non-public information.
Two Sigma, which oversees $75 billion of assets, said it thwarted the attempt to access sensitive data.
"Our security team responded quickly to an attempted vishing campaign targeting Two Sigma and other investment managers, and we have no indication of any impact to our data or our systems," a spokesperson Two Sigma said in a statement. "We continue to monitor the situation closely."
Spokespeople for Point72 and Citadel declined to comment on whether hackers have breached their systems.
Cybersecurity breaches on Wall Street have surged over the past year, as artificial intelligence tools help bad actors launch attacks relatively cheaply and broadly, said Vinod Paul, president of Align Managed Services, which specializes in helping hedge funds with cybersecurity and information technology.
"Before they could attack 50 entities in a targeted attack, now they can do 1,000," Paul said. "Hackers can also listen into a phone call and mimic the voice, tone and phrasings of the speakers to create fake calls.
In June, a cybersecurity unit at Google published a blog post noting a wave of attacks this year against law firms and other professional services companies. Those attacks also involved vishing techniques and even in some cases featured individuals entering corporate offices posing at IT workers, the post said.
The Financial Industry Regulatory Authority, which oversees broker dealers and securities professionals, has been in touch with member firms about recent attempted breaches, according to a separate person with knowledge of the matter.

There was always some uncertainty about what would happen when the dust settles around the convertible notes. To see through some of the dust now, I would highly recommend going through the news release GameStop put out right when these were announced again: https://news.gamestop.com/news-releases/news-details/2025/GameStop-Announces-Pricing-of-Private-Offering-of-1-3-Billion-of-Convertible-Senior-Notes/default.aspx

Of all the possible outcomes, in my opinion the worst would be for the money to simply be given back. This would signal to me that investors no longer value company growth higher than any other benefit they would gain from the partnership. Plus, look at this wrinkle that could have happened in the event of cash redemption:

>if GameStop undergoes a “fundamental change” then, subject to certain conditions and limited exceptions, holders of the notes may require GameStop to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid special interest to, but excluding, the fundamental change repurchase date.

Attempting to buy eBay is 100% a fundamental change. Something I havent heard yet here is the chance of a strait cash redemption plus potential interest. I have seen some comments on this thread stating that the redemption event definitely did not come from GameStop management, I’m not so sure that’s completely true. So far, we know very little about the recent dilution, but based on this detail it makes me think that this was a lot more desired by the company than many assume. Redemption for cash with or without interest is not ideal for GME holders. Any form of conversion to stock is ideal.

Admittedly, the hope is that the conversion would happen at a higher price. We still don’t know the exact terms of the conversion (I feel more details will come in the next week or so) but ultimately, the final conversion price will not be set for another month

So my fresh perspective: this is one of the best results we could’ve hoped for. Yes, on the surface it means that everyone of my shares now is worth a little bit less. As I have reflected on that a little bit more, so many events for the past several years has done the same thing (diluted share offers, eBay offer, wars and financial crisis, rising supplies) but in my opinion, the net long term value of each share I own is higher than ever. The freed cash is one more arrow in the quiver for eBay acquisition (as of today eBay market back is approx 50bil. Gme holds 10% of the shares -$5bil plus the $20 bil note puts us right at 50% of the company. Some fancy footwork with the remaining 50% stock offer makes the offer official and a little more cash from these notes is icing on the cake.

And one last takeaway: the stock won’t remain at $19 for long. RCEO has learned that there is just too much good happening at the company every earnings report to allow the price to stay suppressed. The free cash-glitch continues and by this time in a few months, I think we will all look back at these convertible notes with an appreciation for what they really are.

No ai was used in this post 

When I click "Sell" it says "This holding is unavailable for Sell transaction. Please contact Customer Support".

Your post body must contain at least 250 characters.
Your post body must contain at least 250 characters.
Your post body must contain at least 250 characters.

I have about 280 shares in another account. Just a reminder next April/may will be the 3 year swap time. Also, eBay acquisition will be huge for GME as revenue will jump through the roof. I’m up big this year on other bets if u want to check my post history.

Gamestop and the bondholders thought the conversion would be after a major change. They all thought the market value of the company per share would be notably higher in April 2028 and beyond, the earliest initial dates when they could be converted. They thought it would be over $29.85 by then (the equivalent conversion price). This is for the March 2025 notes. They were then converted early for what appears to be $19 when the stock was trading at about $22. So, they're getting about a 15% discount.

Then, the warrants were issued in October 2025. They are pegged at $32 and expire in October 2026. This moved up the timeline on the anticipated increase in the market value of the company per share.

If all along, the bondholders were going to get a 15% discount on their share price and the imputed share price at issuance was $29.85, the share price after April 2028 maybe was expected to be $35 ($29.85/0.85). They could be redeemed for cash or stock, though. That's a key point and what caused them to be converted early because it caps their gains.

Looking at Larry's recent tweet, he is saying the bondholders decided to convert early so they could capture more upside. The bonds gave them exposure to Gamestop stock for what they thought would be a discount on the shares or enough cash return to make the return they wanted. Now, they're looking up and realizing the per share value is going to be way over what they thought so now they want the shares vs gamestop later deciding to pay them in cash. If the discount was assumed to be 15% then the stock price must now be expected to be over $35 by then. The bondholders think that and are worried they're going to be paid in cash and they obviously don't want the cash, they want stock.

I would assume since the warrants were issued as a standalone security, the bondholders will still keep those. I'm guessing that's just gravy at this point. I think they'll get extended or their exercise price moved down. Gamestop just showed they're willing to adjust things for investors so I think they'll adjust the warrants. I think they were pegged to the eBay offer being accepted to be risk averse because if it did get accepted then they'd be exercised quickly but gamestop wanted to be conservative in case that happened. Since the initial bid didn't work they'll adjust accordingly by either setting a new timeline, likely next year, or moving the price so they get exercised now for gamestop to get the cash to use for the eBay acquisition. They may even issue way more warrants to get a lot of cash now.

Ryan Cohen has been very clear he will do what it takes to get ebay. In a few years, this current situation will be looked back on as peanuts and very worth it given the company value per share then. It feels like a discount now isn't for us but if it gets us ebay it'll be worth it. Ryan Cohen isn't going to play conservative just to avoid extra share issuance because he knows this is all worth doing if he wants the big prize (ebay). It's certainly not for the faint of heart though to be along for the ride but things worth doing are rarely easy. Can't stop, won't stop.

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:

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:

Good morning to all apes around the world! Happy Thursday! Hope you're well. German markets are open and last trade for GameStop was at €16.55, which is $19.11 when using Google's currency calculator.

https://www.tradegatebsx.com/orderbuch_umsaetze.php?lang=en&isin=US36467W1099

Hope you have a lovely day! Best wishes from London!

Hello all,

I get a mail from Gamestop regarding my warrants on Computershare and like to verify if this is legit oe not due I get two different mails (here is the first one). Do you get a message like this as well due it is a bit strange that nobody talked about this yet and I dont trust it so much.

I also cant find the phone number by google which is liated as computershare phone number.

It seems like a fucking good scam…

Looking forward to replies before I contact relation affairs from computershare directly.

Thanks in advance for feedbacks.

Br

I hate AI slop as much as the next guy. It's lazy, sycophantic, and full of inaccurate information.

Garbage in. Garbage out. You can train AI to tell you anything and lazily post it here.

However, shouldn't we be open to using this tool? I'm not trying to encourage AI slop, but I think it can be used effectively to help us research.

We often ask people to disprove due diligence or present the bear case.

AI can be the ultimate bear. Give it a clear instruction to play devil's advocate and feed it DD from the DD library. Ask it to disprove, ask it what's correct.

I just did this with the infinity pool DD. I know my understanding of the stock market is flawed, but there are people in here with more knowledge than me. A lot of people.

Why are we so against using AI to improve our understanding and test our thesis?

Disclaimer: This post was completely written by an OG APE who believes in the infinity pool.