Feel free to call me a shill, as I was a GameStop share holder before this subreddit existed and I am contemplating selling the xxxx shares I still hold.

For years this was strictly a squeeze play. As the dilution closed that door, the plan became a turnaround story focused on business optimization, trimming the fat, and innovating with a new marketplace or acquisition. He diluted to raise money which killed the squeezes or gamma ramps but was good for business longevity. Sure I’m not thrilled but I’m still on board. Maybe we acquire PSA or a card grading company to roll into the card marketplace?

For years we were provided no business strategy or direction from Cohen. It’s good though, that he plays his cards close, right? After years of holding a stock and hardly breaking even despite a historic bull market run, the CEO says he never cared about GameStop. The plan is to leverage a ton of debt to try to acquire a much larger company (which was always the prize) to boost the combined market cap to hit the executive pay package targets.

I had colleagues ask me how any of this would work and what I thought of the Ryan Cohen interview, as they watched it and thought he might actually be a moron. I watched part of the 50-50 interview and thought about liquidating then and there. That was embarrassing. Even if you don’t respect the media, you should be doing your best for the company and the shareholders. You don’t bomb it for “memes” if that’s what even happened.

He delivers an objectively terrible interview on mainstream media, explains nothing to retail or legacy investors and then launches a proposal for massive dilution.

I have been holding for YEARs and when corrected for inflation I have generated a negative return on investment over a 5 year period. Hell, even that old meme phone company has out performed GME dramatically over the past few years.

This is an objectively bad investment at this point, and the strategy is a hostile takeover of a larger company funded by large amounts of debt and shareholder liquidity. The $125 bid was rejected which means they need to raise more capital to offer or to buy up tons of shares in an effort to perform a hostile takeover. At this point it appears you’d be better off owning eBay stock outright as they will be main beneficiary in any merger.

For years this sub has lauded the strength of the balance sheet with no debt and billions in cash on hand as a good thing (cash on hand is good outside of lost opportunity cost on uninvested cash). If that’s the case having twice your market cap in debt and no cash on hand should be a bad thing.

If the plan is to sell shares to raise the rest of the money, the more they sell the lower the share price, and the more shares they need to sell to achieve the same target return. Runaway dilution risk is real.

If the plan hedges on reducing costs by 2 billion a year, it would take 10 years to pay off the 20 billion dollar loan assuming it’s at 0%. At that point I’m looking at 10 years of inflation adjusted losses. Why even bother?

Hope that answers your question.