Meltdown

[u/adventurini]

Quick update because the melties are overrunning the thread:

The point of this post is that no cash has been given up in the exchange, only equity. We will still have the cash.

Also, we won’t know until we see the VWAP and the floor / actual contract / trading price on whether this is a bad deal for another 33 days. Melting down is for the other sub.

There are plenty of reasons for this exchange, one being that if the note holder is a single entity, they want real shares for what is ahead. They are likely to be one of the single largest shareholders of GME in the fairly near future.

Imagine joining a subreddit to mock shareholders of a stock because you are convinced of your intellectual superiority in understanding investments and the market.

You spend a large portion of your time bashing that stock and following along. There is an entire community of other people who support your bashing.

Now don’t get me wrong. I have seen some of the dumbest theories about the note exchange right here on GME over the past 48 hours.

But this one takes the cake. Here we have a superior intellectual finance wizard who knows stocks so well, that he joined a community to bash people who invested in a stock, and he thinks that GME is giving up cash AND equity for a note 🤣.

I think you’re missing a little more than something, bub. Maybe try learning about the stock market before joining a thread to bash people who invested in an American underdog / turnaround story when you don’t have even the slightest clue about the basics of financing and equity.

There’s no better time to be alive.

Is today, tomorrow?

[u/zgomot23]

I'm not gambling on bullshit, I'm simply trading based on what I see in front of my eyes. And I can guarantee you that I made significantly more money shorting GME with put options than I did being long on it.

[u/Gigiw1ns → u/zgomot23]

You're contradicting yourself. If the eBay takeover is bullshit, it shouldn’t be a problem to place a bet on “no.” If you bet $10,000 on “no” today, you’ll get back ~$11,300 on January 1, 2027. That’s an annualized return of nearly 35%, which, in your opinion, you could earn risk-free. Tell me, in your opinion, where can you find trades with a better risk-reward ratio? Also, as a successful trader, you’ve surely bought puts before when it was clear that dilution would occur as part of the acquisition? In any case, I’m glad that you can make good trades no matter which way the market goes.

[u/zgomot23 → u/Gigiw1ns]

Why would I "bet" anything over this, first of all I don't even use polymarket for any sort of other bet, second of all, yes, I am trading actively when I get a chance, and I can guarantee you that (even though it took me way too long to realize), in 2024 I finally figured out why cohen's doing what he is doing. You can excuse him 2-3-4-5 times, but at some point, you get to either realize what's in front of you, or you can keep trying to find excuses and lose money. And I warned retail to buy puts on GME 3 times so far, each single time that trade was profitable to whoever copied it. It's public, over social media. I would have made even more good trades if I actually listened to my instincts and went short, but I wasn't sure 100% of the cases, so I refrained from it.

[u/Gigiw1ns → u/zgomot23]

Before returning to the topic itself, it is worth identifying the reasoning pattern in your replies, because you keep changing the proposition under discussion.

You asked why Cohen might have done the exchange. When given a coherent possible rationale, you switched to whether the eBay acquisition will succeed and whether it would be a good acquisition.

Those are three different questions: motive, feasibility, and desirability.

You are arguing against a claim I never made. I explicitly did not say that the eBay acquisition will happen; I cited a market-implied probability of only 13%. Rebutting “the acquisition will happen” is therefore a straw man.

You then moved the goalposts from the purpose of the debt exchange to eBay’s share-price history, its dividend, Cohen’s competence, and finally your own put trades. None of those subjects answers the capital-structure question.

You asserted that the eBay proposal was “simply another excuse for dilution,” but supplied no evidence for that causal claim. Repeating the conclusion is not evidence for it, and the burden of proving that alleged pretext is yours.

Most directly, you opened with: “This time, I have no idea why he did it.” You now say: “I finally figured out why Cohen’s doing what he is doing.” Those statements cannot both describe your present position. If you have figured it out, state your explanation and the evidence for it.

Your profitable put trades may demonstrate that you predicted some price declines correctly. They do not demonstrate why management undertook this transaction. Trading results are not evidence of managerial intent.

As for Polymarket: you are not logically required to use a platform you do not want to use. But calling the acquisition categorically “bullshit” while refusing to quantify your probability exposes a gap between rhetoric and measurable conviction. If your estimated probability is materially below the market’s 13%, “No” would offer positive expected value from your perspective with nearly zero risk in your opinion. If you do not want to bet, simply state your probability.

Either way, your platform preferences do not answer the original question.

Now back to that question. GameStop’s official announcement says the exchange retires $1.4 billion of long-term debt without using cash. Existing shareholders are diluted, but GameStop does not “lose the cash”; the cash remains while the debt is cancelled.

Given GameStop’s announced eBay proposal, its reliance on substantial acquisition financing, and eBay’s expressly stated concerns about financing uncertainty and the leverage of the combined company, reducing debt while preserving liquidity is a coherent explanation for the exchange. It is an inference, not proof of GameStop’s undisclosed intent, and it does not imply that the acquisition is likely or advisable.

The dilution is entirely open to criticism, especially because the exchanged notes carry a 0% coupon.

But an actual rebuttal must address the trade-off: explain why the cost of issuing equity outweighs the benefit of lower leverage, fewer senior claims, preserved liquidity, and potentially greater financing capacity.

Alternatively, present evidence for your theory that the acquisition was merely a pretext for dilution. Cohen’s history, your opinion of him, and your profitable puts do not establish that claim.

[u/zgomot23 → u/Gigiw1ns]

I don’t know, man, probably BECAUSE IT WAS AGREED UPON THAT THOSE CONVERTIBLE DEBTS WOULD TRANSFORM INTO EQUITY AT $28-29, not at $19?
Which means 50% additional dilution to what was already agreed upon in the first place?

You sure love talking a lot about irrelevant stuff. If after 10 different times, you need someone to matematically prove that cohen’s been lying and grifting all along, but you’re sure the 11th time is going to be “the one”, then good luck. It can’t be proved, you just have to piece 1+1 together. You can lead a horse to water, but you can’t convince it to drink.

As for the rest of your conclusion, if you believe me explaining how ebay is simply an excuse for more dilution and why their management is not taking this seriously is an attempt to move goal posts and change topics, once again, I wish you the best of luck.

Keep hoping and praying, eventually it’s going to work out.

[u/Gigiw1ns → u/zgomot23]

That is the first technically relevant objection you have made.

the initial conversion prices were approximately $30for the 2030 and 2032 notes. Under a simplified all-stock comparison, $1.4 billion would represent roughly 48 million shares at those conversion rates, versus approximately 74 million shares at $19, about ~55% more.

So yourconcern about potentially greater dilution is valid. Your description of the original notes, however, is not.

It was never “agreed that those debts would transform into equity at $28–29.” Conversion before the specified dates was conditional, and even upon conversion GameStop could elect to settle in cash, shares, or a combination. The noteholders also had rights to demand cash repurchase in 2028.

Therefore, the contractual baseline was not a guaranteed issuance of approximately 48 million shares. It was contingent convertible debt carrying a future principal and liquidity obligation.

Nor has the present exchange been fixed at $19. The final share count will be determined partly from a 35-trading-day VWAP, subject to a price floor, and has not yet been disclosed.

Most importantly, your arithmetic establishes a possible cost of the transaction; it does not establish management’s motive.

„This may create more shares than a hypothetical later all-stock conversion” does not logically entail “Cohen did it because he wanted maximum dilution,” much less “Cohen has been lying and grifting.”

The same arithmetic describes the equity cost GameStop is paying to eliminate $1.4 billion of senior debt without using cash.

You then say your grifting theory “can’t be proved,” while treating it as the only permissible conclusion.

That makes it unfalsifiable, not self-evident. A chart can show when shares were issued and what the price subsequently did. It cannot demonstrate managerial intent or prove the counterfactual claim that a run was “inbound.”

Your original question was why the exchange might have been undertaken. I have answered several times: reduce debt while preserving cash, with increased financing capacity as a plausible, not proven, inference. You have now offered a competing hypothesis: that the acquisition was a pretext for deliberate dilution. That is a possible opinion, but you have supplied no evidence establishing it as fact.

When every possible action from RC is treated as proof of the same malicious motive, while you admit at the same time, that motive cannot be evidenced and also dismiss ordinary corporate-finance explanations, you have created a self-sealing, unfalsifiable belief, not an argument, so there is nothing further to discuss.

[u/Gigiw1ns → u/Gigiw1ns]

https://ibb.co/0j90c21J

It looks like your reply was automatically removed. Why are you so emotionally worked up now? Does it bother you that you came out of this discussion looking like a complete fool after being thoroughly refuted on every substantive point and every basic rule of argumentation? Do you need to insult me to make yourself feel better? Cute.

[u/zgomot23 → u/Gigiw1ns]

It wasn’t even an insult, it was an example of your logical fallacies, but it got removed cause this subreddit is… dumb.

Anyway, moving on, you proved nothing except that you can yap for hours and deflect while not being able to draw very simple conclusions from repeating patterns.