E Reddit Mentions | ChartExchange

Full disclosure, I've been holding since 2021, I've seen a lot of FUD. Without doxxing myself, I work in Enterprise Risk Management for large corporates for 15+ years. Here's my take on all this.

NFA.
# Base deal terms
GameStop has proposed to acquire eBay for **$125 per eBay share**, split **50% cash / 50% GME stock**.
Using **444m eBay shares outstanding**, the basic transaction math is:
* Total offer value: **$55.50bn**
* Cash consideration: **$27.75bn**
* Stock consideration: **$27.75bn**
* Cash paid per eBay share: **$62.50**
* GME stock value issued per eBay share: **$62.50**
* Formula for new GME shares: **$27.75bn stock consideration / GME issue price**
* GameStop cash / liquid investments referenced in the proposal: **\~$9.4bn**
* Acquisition financing referenced in the proposal: **up to $20bn**
* Management cost-reduction claim: **$2bn annualized cost reductions**
# Important correction on ownership
There are two ways to talk about ownership:
1. **Current common-share / voting-power basis**
* Existing GME shares: **\~448.4m**
* This is the cleaner way to think about voting power.
2. **Diluted / economic modelling basis**
* This can include diluted shares, convertibles or other securities depending on the model.
* This can make legacy GME ownership look higher or lower depending on what is included.
For voting power, I think the cleaner number is the **current common-share basis**.
At a **$25 GME issue price**, GME would issue:
**$27.75bn / $25 = 1.11bn new GME shares**
So the post-deal common share count would be:
**448.4m existing GME shares + 1.11bn new shares = \~1.56bn total shares**
That means legacy GME common shareholders would own roughly:
**448.4m / 1.56bn = \~28.8%**
Former eBay shareholders would own roughly:
**71.2%**
# Table 1 — Financing case comparison
The cash/debt case changes **gross debt**, **cash left**, and **interest cost**. It does not change the stock dilution.
Assumptions used:
* Cash consideration: **$27.75bn**
* Base combined EBITDA before synergies: **\~$2.93bn**
* Full synergy EBITDA case: **\~$4.93bn**
* Assumed acquisition debt interest rate: **8%**
* These numbers are approximate and meant to show order of magnitude.
|Financing case|GME cash used|New acquisition debt|GME cash left|Pro forma cash / liquid assets|Pro forma gross debt|Pro forma net debt|Cash interest @ 8%, incl. existing interest|Net debt / EBITDA, no synergies|Gross debt / EBITDA, no synergies|EBITDA / interest, no synergies|EBITDA / interest, full $2bn synergies|Net debt / EBITDA, full $2bn synergies|
|:-|:-|:-|:-|:-|:-|:-|:-|:-|:-|:-|:-|:-|
|Maximum cash usage|$7.01bn|$20.74bn|$2.00bn|$7.87bn|$31.64bn|$23.77bn|$1.90bn|8.1x|10.8x|1.5x|2.6x|4.8x|
|Balanced case|$5.00bn|$22.75bn|$4.01bn|$9.88bn|$33.66bn|$23.77bn|$2.06bn|8.1x|11.5x|1.4x|2.4x|4.8x|
|Debt-heavy case|$2.00bn|$25.75bn|$7.01bn|$12.88bn|$36.66bn|$23.77bn|$2.30bn|8.1x|12.5x|1.3x|2.1x|4.8x|
The key point from this table:
* Using more GME cash reduces gross debt and interest expense, but leaves less liquidity.
* Preserving more GME cash means more debt and higher interest expense.
* Net debt stays roughly similar because less cash used = more cash left on the balance sheet.
* Even the maximum cash usage case requires roughly **$20.7bn** of new debt in this simplified 100% acquisition case, which is slightly above the **up to $20bn** financing amount referenced in GameStop’s proposal.
# Table 2 — Share issuance, ownership and rough day-1 value
This table uses the **current common-share basis** for ownership.
Assumptions:
* Existing GME common shares: **448.4m**
* eBay shares acquired: **444.0m**
* Stock consideration: **$27.75bn**
* Current GME market price used for comparison: **\~$23.97**
* Current GME market cap: **\~$10.75bn**
* Current eBay market cap: **\~$47.25bn**
* Current GME enterprise value: **\~$6.28bn**
* Current eBay enterprise value: **\~$50.87bn**
The “rough no-synergy EV lens” means: value the combined company using today’s standalone enterprise values, subtract pro forma net debt, and divide by pro forma shares. This is not a prediction. It is just a mechanical valuation check.
|GME issue price|New GME shares issued|Pro forma common shares|Legacy GME ownership|Former eBay ownership|Rough day-1 share price using current EV / no-synergy lens|Change vs current \~$23.97|
|:-|:-|:-|:-|:-|:-|:-|
|$10|2.775bn|3.223bn|13.9%|86.1%|\~$10.36|\-56.8%|
|$15|1.850bn|2.298bn|19.5%|80.5%|\~$14.52|\-39.4%|
|$20|1.388bn|1.836bn|24.4%|75.6%|\~$18.18|\-24.1%|
|$25|1.110bn|1.558bn|28.8%|71.2%|\~$21.42|\-10.6%|
|$30|0.925bn|1.373bn|32.6%|67.4%|\~$24.30|\+1.4%|
|$35|0.793bn|1.241bn|36.1%|63.9%|\~$26.89|\+12.2%|
|$40|0.694bn|1.142bn|39.3%|60.7%|\~$29.23|\+21.9%|
|$50|0.555bn|1.003bn|44.7%|55.3%|\~$33.27|\+38.8%|
|$60|0.463bn|0.911bn|49.2%|50.8%|\~$36.65|\+52.9%|
|$75|0.370bn|0.818bn|54.8%|45.2%|\~$40.79|\+70.2%|
|$100|0.278bn|0.726bn|61.8%|38.2%|\~$45.99|\+91.8%|
The key point from this table:
* The deal is extremely sensitive to the GME issue price.
* At a **$25 issue price**, legacy GME holders go from owning 100% of GME to owning about **28.8%** of the combined company.
* On a rough current-valuation / no-synergy-credit basis, the implied day-1 share price is around **$21/share**, versus current GME around **$24/share**.
* That means the full-synergy upside is not immediate. The immediate position is more like: dilute first, take on debt first, then hope the synergies are delivered and valued by the market later.
# Table 3 — EPS and valuation sensitivity at a $25 GME issue price
This is the part I care about most as a GME shareholder.
GME’s current standalone diluted EPS is about **$0.77**. GME’s current share price of **\~$23.97** implies a trailing P/E of about **31x**.
At a **$25 issue price**, the earlier pro forma model showed the following approximate EPS outcomes.
|Financing case|No synergy EPS|25% synergy EPS|50% synergy EPS|100% synergy EPS|No synergy accretion / dilution vs GME standalone $0.77 EPS|Full synergy accretion / dilution vs GME standalone $0.77 EPS|
|:-|:-|:-|:-|:-|:-|:-|
|Maximum cash usage|$0.48|$0.72|$0.95|$1.42|\-38%|\+84%|
|Balanced case|$0.44|$0.68|$0.91|$1.38|\-43%|\+79%|
|Debt-heavy case|$0.39|$0.62|$0.86|$1.33|\-49%|\+73%|
* Today, standalone GME EPS is about **$0.77**.
* In the combined company, with no synergies, EPS could be around **$0.39–$0.48** depending on financing.
* With full $2bn synergies, EPS could be around **$1.33–$1.42**.
* So the upside case exists, but it depends heavily on achieving and keeping the full synergy number.
# What is the “day-1” value versus the full upside case?
The full synergy case is the attractive version.
At a $25 GME issue price, the balanced case gets to roughly:
**$1.38 pro forma EPS**
If the market valued that at today’s GME P/E of roughly **31x**, the theoretical share price could be around:
**$1.38 × 31 = \~$43/share**
If the market valued it closer to eBay’s current P/E of roughly **24.6x**, the theoretical share price could be around:
**$1.38 × 24.6 = \~$34/share**
So the upside version is roughly:
* **\~$34/share** at an eBay-style multiple
* **\~$43/share** at a GME-style multiple
But that is not day one. That assumes the $2bn cost-reduction case is delivered and the market capitalizes those earnings.
Before that happens, the no-synergy / current-valuation version looks much lower.
At a $25 issue price, the rough day-1 current EV / no-synergy valuation is around:
**\~$21/share**
Compared to current GME at around **$24/share**, that is an immediate rough loss of around:
**\~10–15%**
Depending on the exact share-count and valuation assumptions, I would think about the day-1 downside as roughly:
**\~$19–$21/share before the full synergy case is credited**
So the trade-off is:
|Case|Approximate value|
|:-|:-|
|Current GME price|\~$24/share|
|Day-1 no-synergy / current-valuation lens|\~$19–$21/share|
|25% synergy case, depending on multiple|roughly low-$20s|
|50% synergy case, depending on multiple|roughly mid/high-$20s|
|Full $2bn synergy case, depending on multiple|\~$34–$43/share|
At a $25 issue price:
* Legacy GME holders own about **28.8%** of the combined common equity.
* Former eBay holders own about **71.2%**.
* Legacy GME’s current collective market value is about **$10.75bn**.
* Under the rough no-synergy EV lens, legacy GME’s stake in the combined company is worth about **$9.6bn**.
* That is roughly **$1.1bn** less than today’s standalone GME market value.
* On a per-share basis, that is roughly **$21/share** versus today’s **\~$24/share**.
**Summary**
We are not getting an uplift. We take on considerable risk, exchanging current GME position for a smaller voting stake in a much larger, much more levered company, where the upside depends on future cost reductions being delivered and valued by the market. A market that, like it or not, consistently wants to undervalue RC.
# What would need to be true for this to work financially?
The deal looks much better if several things are true at the same time:
1. GME issues stock at a high price.
2. Debt financing is available at a manageable rate.
3. The company does not over-deplete cash.
4. eBay’s earnings remain intact.
5. The $2bn cost-reduction plan is actually delivered.
6. The market capitalizes the combined company on the improved EPS rather than punishing it for leverage and dilution.
The biggest financial swing factors are:
* GME issue price
* New acquisition debt required
* Interest rate on that debt
* Whether the $2bn synergy target is achieved
* What P/E multiple the market applies after closing
# My personal voting conclusion
Separate from the model, my personal conclusion is simple:
I am voting **NO** against the share issuance.
My reason is not complicated.
If I vote yes, this may be the last time my vote has any meaningful influence over my investment.
At a $25 issue price, legacy GME shareholders would own only about **29%** of the combined company on a common-share basis. Former eBay shareholders would own about **71%**.
Even at a $40 issue price, legacy GME holders would only own around **39%**.
So for me, voting yes means approving a transaction where I dilute myself from a GME shareholder into a minority holder of a larger, heavily indebted combined company.
The upside case may be real if the full synergy plan works. But the loss of voting power, the debt load, and the dilution happen first.
That is why, personally, I am voting no.
# What I support instead
Use GameStop’s cash position to build, acquire, or accelerate a competing marketplace — without handing voting control of the company to eBay shareholders.
From what I have seen, many eBay sellers appear frustrated with the platform. Sellers are the liquidity providers in that marketplace. Without sellers, there is no inventory. Without inventory, buyers leave. The business model itself is not impossible to understand: attract sellers, create trust, bring buyers, process transactions, take a fee.
In GME shareholders alone, we could all switch off eBay once an alternative was available. Becoming the early "buyer" critical mass to support this transition for sellers to leave eBay.
So my view is:
Why pay **$55.5bn** for eBay, issue potentially more than **1bn new GME shares**, and take on tens of billions of debt, when GameStop already has substantial cash and a loyal shareholder base?
I would rather see GameStop:
* use its cash position to build or buy targeted marketplace capabilities;
* poach the people worth having from eBay, payments, trust & safety, seller tools, logistics, fraud prevention, search and marketplace operations;
* offer sellers better economics, better tools and better treatment;
* start with focused verticals instead of trying to swallow all of eBay at once;
* build the marketplace itself over time;
* keep the balance sheet flexible;
* keep existing GME shareholders in control.
In other words: compete with eBay, do not expect me to sell out to eBay.
If the opportunity is that eBay sellers are unhappy, then exploit that weakness directly. Build the better marketplace. Win the sellers. Then win the buyers.
That is a plan where GME shareholders keep their hands on the steering wheel.
The proposed acquisition asks us to give up control first and hope the combined company works later. I would rather GameStop use the cash, the brand, the shareholder base and the balance sheet to build the upside ourselves.
Power to the Players. Let's actually Play to Win. Not Pay to Lose.

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