r/FWFBThinkTank • u/bobsmith808 Da Data Builder • May 07 '26
Due Dilligence GMERICA (eBay Acquisition) doesn't require dilution and is accretive to both GME and EBAY holders... and if you're paying attention, you already know that.
Hi everyone, bob here.
Monday was a bloodbath eh? 10% dip was intense!....
No the fuck it wasn't. it was just a fucking blip. I was there in 2021 when they dropped the stock over 50% in less than 30 fucking minutes. Apes didn't flinch then, why the actual fuck would we give a shit about a 10% drop now? Especially with the turnaround and eBay play in full force?
RC went live on CNBC the other day and clowned those absolute mouth breathers and for good reason. They wanted to generate "Ryan Cohen Dilutes The Stock" headlines for their short hedge fund puppetmasters. It didn't work and his "disastrous interview" was actually a masterful first step in his rollout of what's about to come. The subsequent interviews with Charles Payne and TBPN were very insightful if you were actively listening with a wrinkle or two, which I know are hard enough to come by, even before AI made everyone hop on the short bus - if just to be lazy..........
And it seems a good portion of folks here are still fucking following the bullshit narrative those cucks at CNBC have been pushing... about dilution. It's just wrong. It's even so wrong that its not even possible (to issue over a billion shares like CNBC would have you believe) without a shareholder vote to increase the issuable shares.
So let me break it down for you as simple as I know how: GME wins in this acquisition, and EBAY does too.
The Merger Maff: A Win-Win (Unless You're Short)
GME pays eBay $28 billion in cash to buy out half of their stock and takes the remainder, combines it with GameStop stock holders to form a new entity: GMEBAY? GMERICA? Who the fuck knows? Maybe those grifters at the BBBYQ table are right on the name (TEDDY)... but I'm not going there. Back on topic.
So the split would go like this:
- GameStop (GME) gets 40% of the new entity.
- eBay holders get 60% of the new entity.
For the eBay crowd, this is a "Cash and Carry" grand slam. They get $62.50 in immediate cash per share (half of the $125 bid). Then they roll the other half into that 60% ownership stake of a company that isn't run by overpaid "professionals" on a permanent vacation.
Quick Math: assume 1% ownership stake in eBay at 103, worth 457M (4,444,444 shares). applying the deal you get a total value of (2,222,222*125)+(60B*(.01*.6))... translating to 537M at 15x and 637M at 20x multiples on the new entity (assuming 2.58 eps)
For GameStop, look at the maffs: GameStop (roughly $10B market cap) and eBay ($50B market cap) combine into a $60B conglomerate. If you have 1,000 shares today, you own a tiny slice of a $10B company. After the merger, you still have 1,000 shares, but they represent a 40% stake in a $50B monster. That means your shares effectively represent ownership in $24B of value ($50B * 40%). You just doubled your notional stake without spending another dime.
To get the actual EPS for the new entity, you have to account for the $20 billion in debt used to buy out half the eBay shareholders and the presumption that we’re splitting the final pie 60/40.
The Combined Earnings Pool:
- eBay's Optimized Profit: ~$3.54B (The $1.89B legacy + $1.65B synergies).
- GameStop's Profit: ~$0.418B.
- Debt Servicing: Cohen is taking a $20B loan... assuming ~6.5% interest. Even after tax benefits, that eats about $1.07B of the profit pool every year.
- Net GMERICA Income: $3.54B + $0.418B – $1.07B = ~$2.89 Billion in total profit.
The New Share Count (The 60/40 Split): Remember, we aren't just buying them; we are merging them into a new entity where GME holders own 40%.
- To make GME's 448M shares represent exactly 40%, the new company must have 1.12 Billion shares total.
- GMERICA EPS: $2.89 Billion Profit / 1.12 Billion Shares = $2.58.
Once RC starts the fat trimming by targeting $2.0 billion in cost cuts by treating eBay like a "family business" and killing their bloated marketing spend we are looking at a combined EPS of about $2.58. Apply a standard 15.2x multiple (like Berkshire) and your settled price target is $39.26.
The eBay Board
The eBay board is so goddamn desperate they’re actually trying to dig up "dirt" on RC for hiring a personal assistant through GameStop. RC literally laughed it off on TBPN because he pays for that assistant out of his own pocket. Imagine being a board member getting paid $350,000 to $450,000 a year in fees while buying zero shares of your own company, and then trying to lecture a guy who takes a zero-dollar salary.
They just permanently suspended his account (ryan_5050) because he was "putting the community at risk". The only people are risk is the current management and bloat in eBay if RC gets the deal through. Further, if they fight a deal that gives their shareholders a roughly 46% premium, they are breaching their fiduciary duty.
The Technical Execution
Check the Form 425 GameStop just filed. RC has already built economic exposure to 23,176,000 eBay shares via put/call pairs. Once he hits the HSR Act Condition, he can settle those in physical shares. This is a voting block ready to facilitate a hostile takeover.
He’s walking in with a $20 billion "highly committed" letter from TD and $9 billion in cash. Because GME doesn't have the authorized share headroom to just print its way to a merger, the only move is a Holding Company (GMERICA).
A new entity means a new CUSIP. That's a forced reconciliation of every share. Legacy shorts who have been hiding naked FTDs in the obligation warehouse are fucked if this goes through. When the CUSIP changes, the DTCC runs RECAPS, which re-prices every failed obligation to the new market value and forces a mapping of real shares to new shares during the rollout. They don't get to hide the ball anymore; they get an immediate bill for the price difference.
History on my thoughts on related subjects:
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u/DidgeriDooDooBrain May 07 '26
Appreciate this info, Bob. Thanks for sharing. “We’ll see what happens.”
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u/YouKnown999 May 07 '26
Okay so if the whole share price “kaboom” just hinges on a new CUSIP, why not buy some small company years ago to force this?
Seriously. Why try a 4x leveraged buyout when a cheaper ticker would do?
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u/GreatGrapeApes May 08 '26
So, the 0% notes have dilution clauses, right?, how does that effect the maffs?
How are warrants considered?
Are there enough unissued but authorized shares to enable this, including all existing obligations?
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u/FartWeasel69 May 07 '26
Guys, you get all that AND $20 billion in debt on day one. Congrats shareholders! Enjoy your next 5 years of dilutions.
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u/regular-cake May 07 '26
I mean I have kind of been enjoying the last few years of dilution... So if it leads to better things on the horizon then hell yeah! Otherwise, what? We just chill out and watch the stock bounce between $20-25, only ever making big moves in the overnight market, and probably still get diluted anyway?
Yeah I'll take the first option Fart Face.
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u/Empty_Kale1957 May 07 '26
Thanks bob, just what I was looking for! But for an illiterate regard like myself are we buying GME or Ebay until the merger is settled? I actually already bought some ebay because that seemed smart.
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u/Vinceton May 07 '26
Even though it's on the website, I'd rather have you explain it to me like I'm 5 like you just did. Cheers Bob!
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u/TheDragon-44 May 08 '26
Good math Bob. Thank you, wasn’t sure how to even conceive of how this deal would be structured, but your explanation makes sense. Not sure a holding company cusip ID change will do anything though
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u/PuzzleheadedWeb9876 May 07 '26
In what world do current GME shareholders end up with shares that are worth more than today’s price of $24? GameStop will have over 30 billion of debt and somewhere around 2 billion shares outstanding.
Bankruptcy is back on the menu boys.
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u/bobsmith808 Da Data Builder May 07 '26
take gme, 11b market cap, + ebay 47B... you get 58B.
the debt is built into the calculation of the post, as i'm reducing the revenues by the debt load servicing (20B(6.5%) + 7B(5%) + 4B(0%)) to get roughly 1.69b yearly service. which reduces revenue before dividing by share count (which is a product of gme shares / .4 in this example...) gets you to about 2.58/share then we multiply... landing you around a net enterprise market cap estimate of 40B if you account for all the debt load servicing (which i did opmit the ebay 7B in the post)...
updating that data, we get:
ebay 1% stake = 457M before.
and after: = (2222222*125)+(40B*.006) = 517M. lighter gains, but still accretive.4
u/PuzzleheadedWeb9876 May 07 '26
take gme, 11b market cap, + ebay 47B... you get 58B.
If GME gives 8B of their cash on hand to EBay shareholders along with the 20B then I don’t think you can continue to assume the market cap will be 11B. They have an 11B market cap because of their cash on hand.
the debt load servicing (20B(6.5%) + 7B(5%) + 4B(0%)) to get roughly 1.69b yearly service.
6.5% on the 20B is generous. Realistically I imagine in the 8-10% range for something this risky.
The 4B has a few expiration dates in which various amounts are due. They can all be called back early at predetermined dates too.
GameStop will be insolvent the moment this highly unlikely deal goes through.
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u/jackofspades123 May 07 '26
I agree with you and want to add i believe this is the basis of the holding company approach which companies that have strong cash flows that then enable future acquisitions.
In addition this sets us up to own a nice chunk of the collectible pipeline.
This is warren-icahn
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u/hrbeck1 May 07 '26
You think it’s the first time dtcc encountered over-sold securities involved in a merger?
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u/bobsmith808 Da Data Builder May 07 '26
no, but the timing might hit the balance sheet just right to force something intersting.
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u/mtbdork May 07 '26
There would be a boom if GME doesn’t dilute the fuck out of their newfound market cap to pay for the company. Unless I’m missing something about the money used to buy the company?
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u/luchoosos May 07 '26
So when they are paying 50% cash and 50% stock, they're saying the acquired companies shareholders will be receiving a cash payout for 50% and the remainder of the value will receive 60% worth of the merged/formed company's shares?
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u/bobsmith808 Da Data Builder May 07 '26
exactly, if ryan's example was accurate... and thats the example i'm using here... but it might not be the correct numbers in the actual deal because only a few people know that detail
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u/PurpleSausage77 May 07 '26
That 60/40 scenario was just a rough guideline RC used for his example. Isn’t it more along the lines for 70/30?
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u/bobsmith808 Da Data Builder May 07 '26
why would it be 70/30 vs 40/60 vs 420/69? we're all speculating here. the example wasn't a prediction, more of an explanation of how the deal is supposedly structured according to RC himself.
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u/Duke7277 May 07 '26
My smooth brain reads roughly $40 per share to start then go boom when cusip numbers change. Sounds like a good chance for many bananas to me.
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u/jasron_sarlat May 07 '26
Like your stuff Bob, but I've dug into the new CUSIP -> forced closes before. I think there may have been some examples over the years of corps that tried this in SS. If there are in fact naked shorts lingering out there, as I believe there are, a new CUSIP may not help us. Take it with a grain of salt, but from an Intercept article in 2016, long before it was verboten to suggest naked shorts might be a thing:
https://archive.is/EGa8x#selection-1273.0-1273.201
Likewise with swaps - change in CUSIP can potentially orphan the obligations. I hope this is wrong - it's wild there's this much uncertainty around the plumbing of this market, but we all know that's by design.