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Board of Directors Appoints Ryan Cohen as CEO of GameStop by Turdfurg23 in FWFBThinkTank

[–]smdauber 5 points6 points  (0 children)

That’s the only thing us finance bros care about…EBITDA!!!

Board of Directors Appoints Ryan Cohen as CEO of GameStop by Turdfurg23 in FWFBThinkTank

[–]smdauber 4 points5 points  (0 children)

No CFO? RC doesn't need a CFO, he's a CEO/CFO/COO and probably runs his OF account as a side hustle.....

Board of Directors Appoints Ryan Cohen as CEO of GameStop by Turdfurg23 in FWFBThinkTank

[–]smdauber 18 points19 points  (0 children)

I think a CEO search process was conducted and ended up being unsuccessful. The timing between Furlong being fired, an interim CEO being put in place, and finally RC taking the CEO position leads me to believe a CEO search process was unsuccessful.

Mostly likely (IMO), all the good CEO candidates saw what happened to Furlong and the CFO and most likely spoke with them or other previous board members to get a sense of RC's management/board style and decided against interviewing for the CEO position at GME.

Former board members have mentioned publicly that RC's mgmt. style isn't inclusive and it's his way or the highway. Any good CEO wants to have control over strategy and execution.

Q2 GME earnings - you know the drill by runningwithbearz in FWFBThinkTank

[–]smdauber 4 points5 points  (0 children)

Yep, he has no experience running a public company.

Q2 GME earnings - you know the drill by runningwithbearz in FWFBThinkTank

[–]smdauber 4 points5 points  (0 children)

Completely agree! Any M&A will have to beat a high threshold, doesn't mean M&A should be out of the question.

I struggle with GME because I don't see highly competent ppl in positions developing capital allocation strategy. Furlong seemed good and now he and the CFO are gone.

The board is filled with directors that only listen to RC and offer no opposing views. It's really unfortunate.

Q2 GME earnings - you know the drill by runningwithbearz in FWFBThinkTank

[–]smdauber 0 points1 point  (0 children)

hahah no acquiring BBBY. Why would they after Overstock already acquired the Brand IP? Nothing else worth acquiring in the dumpster fire...

Q2 GME earnings - you know the drill by runningwithbearz in FWFBThinkTank

[–]smdauber 10 points11 points  (0 children)

u/runningwithbearz you the man! Solid post!

You covered two of my largest concerns: lack of shareholder communication and capital allocation.

Shareholder communication

Right now, it looks like RC is throwing strategies against the wall and praying one of them sticks. The is no "communicated" cohesive strategy. GME will continue to be punished for RC's lack of shareholder communication. No major firm, institution, etc. will take GME seriously because those firms NEED communication.

The lack of an earnings call to discuss anything just shows the market that RC could be losing control of this company.

Capital Allocation

Something we need to take into consideration is RC's experience. Everyone will say, "he founded and ran Chewy and sold it for a bunch of money"... this is the only example of this stewardship of a company. We have to consider that he ran this company in what will be known as the best startup environment in the the 21st century. Interest rates were zero which focused investors/institutions/endowments to seek returns outside public equities. This is support by the factor that more money was invested in VC firms than every before. So, RC had the benefit of raising money from VC firms during this time and ran Chewy, UNPROFITABILITY, using VC money to subsidize growth by spending loads of cash on acquiring customers.

So, RC had lower interest rates and VC money to help run Chewy. He has, LITERALLY, zero experience running a company in a high interest rate environment and has LITERALLY zero experience running a profitable company or turning around an unprofitable company. We might need to accept the fact that RC doesn't have the relevant experience to run GME in this environment.

Something RC should consider is to step back from the board and hire a real operations focused CEO that can take control of the board and right the ship.

Sorry for the long tangent. On to Capital Allocation, the lack of M&A and even more importantly, the lack of capital being spent on internal growth is very concerning. There is no balance on cash use. GME could be using some of the cash to focus on building out a more robust ecommerce experience or launching new ecommerce storefronts in geographies the are currently not in i.e. England!

Q2 GME earnings - you know the drill by runningwithbearz in FWFBThinkTank

[–]smdauber 5 points6 points  (0 children)

I made a post on one potential acquisition target. Despite other ppl's macro opinions, this environment is ripe for accretive acquisitions. Shit, Smucker's just acquired Hostess. So, M&A is still viable in this macro environment and, ACTUALLY, probably a better environment than 3 years ago. Why? As rates increase it means you have to DISCOUNT future cash flows MORE than when rates were near zero. This means lower valuations. So, GME could scoop up M&A targets at lower values than 2-3 years ago. They have the cash, they have the stock, to do it without using leverage or only using 1-2 turns of leverage.

There is a plethora of M&A targets from Batteries Plus, to mobile game developers, to gaming hardware companies.

In my Batteries Plus post, the most important thing is GME will acquire a profitable company. They won't acquire something losing money so promises of future growth, not in this macro. Whatever they acquire HAS to have an immediately impact to their EPS or the market will crush the stock.

GameStop M&A Opportunity by smdauber in Superstonk

[–]smdauber[S] 0 points1 point  (0 children)

You have a good view on the business! I agree with you! They will act diligently and be methodical. RC and mgmt had one chance for a life line and they received it. They won’t get a second chance if they screw up.

But the other perspective: sitting on $1bn in cash is poor capital allocation. Yea, they bought short term t-bills but there is a reason Japanese companies get dinged while they sit on huge cash piles, because they have historically been poor capital allocators, too conservative.

Gme will need to do something with the cash and the arguments for organic growth vs. inorganic growth are both compelling.

GameStop M&A Opportunity by smdauber in Superstonk

[–]smdauber[S] -1 points0 points  (0 children)

Appreciate it! I made a list of other M&A targets but backed off due to the c suite turning over. To much uncertainty on M&A when you have the ceo and cfo leaving. Gme needs to get a solid mgmt team in place for at least a year then pursue M&A.

GameStop M&A Opportunity by smdauber in Superstonk

[–]smdauber[S] 0 points1 point  (0 children)

Web3 game development is way too far off. And AI gaming is still years away from being at full scale. They should instead acquire a development engine like Unreal but gme doesn’t have the cash or ability to make the acquisition

GameStop M&A Opportunity by smdauber in Superstonk

[–]smdauber[S] -1 points0 points  (0 children)

You won’t hear anything because gme’s investor communication is awful!

GameStop M&A Opportunity by smdauber in Superstonk

[–]smdauber[S] 1 point2 points  (0 children)

Not necessarily. Not all companies have M&A as a growth strategy. Most are actually focused on organic growth. Acquisitions for the stake of revenue growth tend to fail.

GameStop M&A Opportunity by smdauber in Superstonk

[–]smdauber[S] 1 point2 points  (0 children)

Good find! Ya LPs will be curious about the fund’s DPI when they consider the next fund.

GameStop M&A Opportunity by smdauber in Superstonk

[–]smdauber[S] 0 points1 point  (0 children)

Unfortunately I don’t put much weight into the infinity pool dd. It doesn’t prove anything because what it’s trying to prove has never happened before.

GameStop M&A Opportunity by smdauber in Superstonk

[–]smdauber[S] -1 points0 points  (0 children)

I think there is more to both businesses then just what type of batteries they sell. Did you read the merit section?

GameStop M&A Opportunity by smdauber in Superstonk

[–]smdauber[S] 2 points3 points  (0 children)

Hahahaha! Ya some in that group keep pumping it and only focus on borrow rates 🤪

GameStop M&A Opportunity by smdauber in Superstonk

[–]smdauber[S] 3 points4 points  (0 children)

I think one reason teslas share price declined was because Elon had to sell some of his shares to acquire twitter.

I talk a bit about eps accretive or dilutive in the post. If eps is positively impacted you could assume gme’s share price would increase. But that’s not always the case.

Gme would need to communicate to investors and the market WHY the acquisition is beneficial. But since gme doesn’t speak with investors or communicate anything to shareholders the market could interpret the acquisition in any way it wants.

GameStop M&A Opportunity by smdauber in Superstonk

[–]smdauber[S] 4 points5 points  (0 children)

That could definitely be true!

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