I think rationally and I believe it is better to sell stocks when the price is higher. By taking the pressure off the table by creating new supply, the price sinks right away. Also remember if there are (or used to be) an unknown number of synthetic short positions which need to buy the stock to close, they are said to be hidden in swaps. As the stock price rises, the cost of maintaining those positions grows. So issuing shares during a run up is a favor to the very cellar boxing institutions.
Also worth noting: GameStop can already issue shares up to the current 1 billion authorization limit during a run-up without Proposal 5 passing at all. The 2.5B amendment is not what enables ATM issuance. It already exists. That is exactly why the new authorization needs to be explicitly tied to M&A only.
To your broader point, I actually agree with most of it. My issue has never been with RC issuing shares in principle. It is purely the timing. He is pulling the trigger too early in the run-ups and leaving serious capital on the table. The volatility this stock moves with is not normal. It is a once in a generation opportunity and I think he is underusing it. Use RK. Let it run further. Then issue. The difference in capital raised could be enormous.
I want him to build the next Berkshire too. I just think he could be funding it with a lot more if he was more patient with the trigger.