PAC Reddit Mentions | ChartExchange

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Did the verification on the goodwill DD. Most of it holds up against primary sources. Sharing what's bulletproof so you can use it without getting sniped on facts.
**What's confirmed in primary sources (use freely):**
- SFAS 142 (June 2001) ended goodwill amortization. Before that, APB 17 made companies amortize it over up to 40 years. Source: FASB direct.
- IRC §197 still lets buyers deduct goodwill over 15 years on taxes. So companies tell investors goodwill is permanent and tell the IRS it's depreciating. Same line item, opposite treatment. Cornell LII / IRC.
- The "political concession" angle is backed by Karthik Ramanna's 2008 paper in the Journal of Accounting and Economics (HBS). He documented PAC money from pro-pooling firms to Congresspeople pressuring FASB. This is a real, peer-reviewed finding from a top journal. Cite Ramanna 2008.
- Every headline impairment confirmed from 10-K/8-K filings on EDGAR: AOL Time Warner $54B (Q1 2002), Microsoft/Nokia $7.6B (FY2015), GE $22B (Q3 2018), ConocoPhillips $25.4B (Q4 2008), Kraft Heinz $15.4B (Q4 2018), AT&T $15.5B (Q4 2020).
- $5.6T total US public-company goodwill. 30-40% of S&P 500 equity is goodwill. **89 S&P 500 companies would have negative book value if amortization came back.** 112 already have goodwill exceeding total equity. Sources: Bloomberg Law analysis, CFA Institute 2021 investor survey, Calcbench, Valuation Research Corp.
- "One-third is overpayment" comes from Henning, Lewis & Shaw (2000) in Journal of Accounting Research. They found the residual averages 31% of recognized goodwill. Real academic finding.
- Kroll 2025 Goodwill Impairment Study: $96B impaired across 8,134 companies in 2024. 2020 was $142.5B.
- **The Feb 4, 2026 FASB meeting is the kicker.** No vote. Project kicked back to staff. Chair Richard Jones literally said amortization "makes more sense" but he's "skeptical the board could get that through." Member Cannon: "We worked very hard to come up with a meaningful amortization schedule, and just couldn't get there." This is the regulator on record saying the rule should change but can't. Source: CFO Dive, FASB spokesperson on the record.
**Deal facts, all from EDGAR (Schedule 13D filed May 4, 2026):**
- $125/share, $55.5B, 50/50 cash and stock confirmed.
- 5% economic stake confirmed: 25,000 shares plus put/call pairs on 22,176,000 shares expiring Feb 23, 2028.
- TD Securities $20B highly-confident letter confirmed. Important: a highly-confident letter is **not committed financing**. Even mainstream coverage is calling out the funding gap. Worth knowing rather than getting blindsided.
- Cohen option grant from the 8-K filed Jan 7, 2026: 171,537,327 options at $20.66 strike, nine tranches, first vests at $20B mcap and $2B EBITDA, full vesting at $100B mcap and $10B EBITDA. The $35B headline number is press math, not in the filing.
- Becky Quick interview confirmed across multiple outlets. His "if I don't hit the thresholds, I don't get anything" line is real.
**Where the DD overstates and shorts will pounce if you don't hedge:**
The basket-rebalancing squeeze leg is the weakest part. FTSE RAFI uses book as one of four equally-weighted factors and rebalances **annually**, not on deal close. Russell RAFI doesn't use book at all. Whether custom institutional swap baskets strip goodwill from book is proprietary and not publicly disclosed. Whether GME sits in book-weighted baskets in size is not verifiable from 13Fs (Archegos taught us 13Fs don't catch swaps). The mechanics are plausible but the magnitude is unverifiable.
If you lead with "mechanical squeeze incoming" you're putting weight on the one leg that has zero primary-source backing. If you lead with **"the same accounting regime that quietly funded $5.6T of PE and Big Tech acquisitions for 25 years is now being run in public by RC with a $35B comp package and millions of retail watching,"** that's the version that holds up under scrutiny. The structural critique is the strong claim. The squeeze is the speculative payoff.
Also worth knowing: Chicago Booth research (Huber & McClure) modeled that *restoring* amortization would actually push more M&A toward PE buyers, not less. So the "PE benefits from no amortization" framing isn't as clean as the DD makes it. Doesn't break the thesis but you'll get challenged on it.
**The bullish bottom line that actually survives source-checking:**
The accounting rules are real and documented. The Cohen incentive structure objectively rewards acquisition-driven growth. The deal is exactly as filed. The $5.6T goodwill bubble is a peer-reviewed phenomenon. FASB itself just admitted on the record they can't fix it. The structural play is real.
The squeeze mechanism is a theory worth holding loosely, not a thesis to bet the farm on.
Read the EDGAR filings yourself. NFA.