NaiveAnalyst

@noLoserThinkPls Fair point, that’s a real risk. And now I use Cohen’s own words “this could be either genius or totally foolish.” But there are still too many pieces missing to call it either way. All we got is some headlines and lots of speculations.Let’s wait and see.

@naiveanalyst7 Didn’t think of that. But the non - bought out eBay shareholders’ cash flow is being used to support the debt and could be crushed by the debt if either business turns down

I’ve noticed that in my article I outlined an $800M eBay dividend payment that could be retained to increase the combined FCF. But after double-checking FY2025 eBay’s Cash Flow statement, I realised I had confused the lines. The $800M was referring to the repayment of senior notes. The actual cash dividend outflows for FY2025 total $531M . So, the corrected numbers are: eBay FCF: $1.434B GME FCF: $0.597B eBay dividends retained: $0.531B LBO interest payment: −$1.371B Combined FCF post-LBO: $1.191B FCF Return = $1.191B ÷ $12.90B ($7B cash + $5.90B newly issued shares) = 9.2% Still a solid FCF return, well above the risk-free rate and consistent with the overall thesis.

@HOTRODCONCRETE Let’s see

@naiveanalyst7 Ebay is nothing but a $GME rumor for now, so let's take advantage and buy the Rumor for now 🥱

“We will deploy the $9 billion on opportunities where the downside is limited and there’s a lot of upside.” That’s a quote that came to mind yesterday, so I went to double-check eBay’s financials to evaluate whether the company is in deep value territory or not. And….It’s not. $EBAY trades near ATH at $104, and last Friday, after the WSJ headline, reached a new ATH in after-hours at $119.5. With the current PPS of $104, the market cap is $46.2B, adding the net debt of $4.88B, the Enterprise Value is $51.08B and with a current EBITDA of $2.99B, the market is pricing the company at 17x EV/EBITDA. I won’t use the P/E ratio here since eBay’s massive share buyback program distorts EPS, so the current P/E of 24x would be higher without it. From the numbers above, you can easily see that rather than a company with limited downside and a lot of upside, it’s quite the opposite from a pure market valuation standpoint. But maybe he wants to pull the trigger and buy a 20% controlling stake in $EBAY (credit: @foxenflask for the thesis) for now, waiting for a market correction to scale up his equity beyond the 51% threshold I discussed in my article, once prices are lower. IF the eBay acquisition announcement is confirmed, I think what Cohen himself defines as “limited downside” goes beyond pure numbers. It lies in the assumption that eBay is a consolidated business with a large, loyal consumer base, and the market perception is simply “eBay keeps doing what it has always done for decades.” IF the news is confirmed, I think Ryan Cohen saw something huge, an unexpressed potential that a sleepy management has been unable to unlock. So: - “Limited downside” to me means: consolidated business, stable cash flow, large and loyal consumer base. - “Lot of upside”: the wild card Cohen is about to play to unleash a massive hidden potential yet to be discovered. But again — I’m just learning out loud and sharing my very naive opinion. I’m stupid, nothing I said is FA. I’m just having fun learning by doing and sharing my dumb opinions.

I wish I had been as early as you. Back in 2020-2021 I was fully invested in crypto and watched the $GME saga as a spectator. After the crazy run, I almost forgot about it, until I came across the movie ‘Dumb Money’ in 2023. That’s what pushed me to deep dive into the company and start accumulating shares and LEAPS. But yeah… I don’t think the market has ever been the same after the $GME squeeze. All the toxic dynamics that were hiding under the surface finally came to light.

I don't know how long you have been following GME since January '21 but there have been MANY oddities surrounding it over the years. Last Thursday where it blipped down to $3.60 for example... I truly do believe GameStop is the worst kept secret suppressed by derivatives. It's all conspiracy theory bullshit until it's not. GameStop becoming more and more valuable will prove it one way or the other.

@belikewat3r Oh yes, i covered that in another post👇🏼

Not exactly. Short exposure means betting against the stock. Cash secured derivatives can be used to create defined risk upside exposure, where the downside is limited to the cash/premium committed, but the upside can be asymmetric if the underlying moves higher. That’s the whole point of using derivatives intelligently.

@R0B0ST0NK3R Absolutely 💯

@naiveanalyst7 They said very clearly that they expect a re-rating of the acquisition target under GameStop stewardship.

@_Freddie_Miles_ @xMarketNews

@naiveanalyst7 @xMarketNews I bought this on eBay a few weeks ago 😂 so bad but I wanted something physical to remember the saga

JUST IN🚨 MICHAEL BURRY PROPOSES ALTERNATIVE ACQUISITION OPTIONS FOR GAMESTOP $GME

@_Freddie_Miles_ @xMarketNews Well I made my first purchase 1 week ago. I got caught up in the hype 😅

@naiveanalyst7 @xMarketNews I do see how the infrastructure with the card trading stuff could be utilized, I guess. I don’t buy trading cards ever though. I don’t really know anyone that does, though I know it’s a big thing

@DoriTradesIt @ryancohen Definitely possible

@naiveanalyst7 I'm pretty convinced that $GME / @ryancohen tries the toehold approach and has bought something like a 4.99% stake until now and expanding it to something like 10% which would allow $GME to get a seat on the board. Actively influencing the decisions at $EBY in $GME favour.

@belikewat3r You mean short exposure?

@naiveanalyst7 Cash Secured Derivatives limit the downside.

@zebular0 @just_k_j @JamesDrgme And it’s even MORE interesting if you consider the recent news developments… was the short community trying to suppress as much visibility as possible for any $GME-related post before the acquisition announcement?

@naiveanalyst7 @just_k_j @JamesDrgme Oh really? That IS interesting...

@foxenflask @xMarketNews I do agree. A 100% buyout is out of the question given the size difference between the two companies. But… who knows? Maybe he has some wild card that we couldn’t even imagine

@naiveanalyst7 @xMarketNews I would also be surprised if Ryan’s bid is for a 100% buyout, seems highly improbable that he would use THAT much leverage. Interested to see how he will move

@just_k_j @zebular0 @JamesDrgme Well, it doesn’t surprise me at all. My account was suspended after Domo Capital reposted my first $GME write up.

@naiveanalyst7 @zebular0 @JamesDrgme I think he’s trying to tell you that your follows are being suppressed potentially lol

@zebular0 @JamesDrgme Ha, X’s algorithm at its finest. Thank you for the follow anyway bud🤝

@naiveanalyst7 @JamesDrgme No no lol, like actually following your account. Said I wasn't following you today, oddly.

@foxenflask @xMarketNews But yes, I agree with you about the overvaluation of eBay.

@naiveanalyst7 @xMarketNews In his article he said he likes the company and concept and the potential. But he just thinks it’s overvalued and he’s not wrong, check out their P/B and P/E compared to PayPal for instance

I was going to make a post about it, I have it in my drafts. What I can say now is that I don’t think P/E is the right metric to evaluate eBay, because of the massive share buybacks they’ve been doing. Those buybacks distort the EPS, making the P/E appear lower than it actually is. It would be significantly higher without them in my humble and stupid opinion.

@LoveFabInc Daily reminder that I'm not a bot yet!

@naiveanalyst7 Thx for the correction. Humans human daily

@zebular0 @JamesDrgme Fair enough, I probably didn’t frame it as clearly as I could yesterday. Glad it makes sense now.

@naiveanalyst7 @JamesDrgme Interesting... said I wasn't following you after I very much did yesterday.

In a standard LBO, the debt sits at the parent company level (in this case GME), not on the target company, so minority shareholders are not directly exposed to it. Furthermore, Under Delaware law (where eBay is incorporated) and SEC tender offer rules, minority shareholders cannot be expropriated without fair compensation. I wouldn’t say it’s “unfair”, but it’s technically and legally complex.

@naiveanalyst7 Can you buy half a company and then use the whole company for to lever up? Seems unfair to the half you didn’t buy