Sam Kovn

Lie to get to the truth

[bad robot ventures @foxenflask]

Updated Q2 Earnings Projections for $GME

FYI, the July market performance numbers for gaming and collectibles aren’t out yet, so I will update these projections one last time when they come out at the end of this month.

- Hardware/Accessories: ~$300-330M
- Software: ~$145-160M
- Collectibles: ~$380-420M

Total Revenue: ~$835-910M

- Operating Income: ~$141-163M
- Interest Income: ~$51-65M (less than usual due to cash being used in acquisition activities)
- $BTC mark-to-market* unrealized loss: (~$65-75M)
- $EBAY mark-to-market unrealized gain: $215-225M (incremental, not cumulative)
- Sale of French Ops: ~$140-152M (one time gain)
- Tariff Refunds*: ?

Total Net Income: ~$482-530M

*Mark-to-market means the incremental gain or loss from the beginning of the quarter, May 3rd, to the end of day on August 2nd (assuming based on last 2 years). It is also unknown if GameStop will/has applied for and received tariff refunds, but important to note regardless.

[👑Magnifishit🧻 @TheMagnifishit]

Last week $EBAY spent $1.4B cash acquiring Depop. Today $GME agreed to retire $1.4B of debt for equity without using cash.

These offset each other in the combined company’s pro-forma net debt which is key because TD’s $20B of acquisition financing assumes investment grade ratings from at least two major agencies.

VWAP T+35 from today through 9/21 (with an undisclosed price floor) determines how many shares will be issued by around 9/23. The higher $GME trades, the less dilution there will be.

The media assumes GME needs to issue shares at the current price to fund the half stock portion of their eBay offer. That’s ~1.3B new shares with GME in the $19s.

That assumption conflicts with the combined company rollover model Cohen has hinted at in interviews. That model produces ~650M new shares. Half the amount of shares the media expects, which is a wildly different valuation.

What happens when the market realizes it modeled the wrong transaction?

[bad robot ventures @foxenflask]

There is money moving into Collectibles behind the scenes that most people don’t know about, and I’m not just talking about $GME. SWFs, Private Equity funds and even institutional investors are pouring capital into this asset class and its infrastructure. Even if you’re not in the private wealth industry, premium subscriptions to Pitchbook and Crunchbase can show you a LOT of this information. And don’t forget, SWFs don’t typically invest in US companies directly, they usually like being LPs (investors) in funds like Clearlake/Silver Lake and then those funds deploy the capital into these investments. Follow the money.

[Sam Kovn @samkovn]

@foxenflask Congrats @foxenflask

[Sam Kovn @samkovn]

@foxenflask Yes

[Sam Kovn @samkovn]

@foxenflask Yee saw that clip😂

Gotcha, appreciate it!

You see any other buyers coming in for ebay or ?

[Sam Kovn @samkovn]

@foxenflask Just answer its fine

[Sam Kovn @samkovn]

@foxenflask Here to listen for any new takes.

How come you figured out all cash offer?

[Sam Kovn @samkovn]

@p1stocks @violacapital

[Sam Kovn @samkovn]

@foxenflask I could see XBOX doing a comeback, not just with physical discs but as a platform.

I speculate high demand for project helix (not just one device).

[bad robot ventures @foxenflask]

A reminder, Nintendo sells the most physical games (~50%, compared to ~20% for Sony and ~7% for Xbox) amongst the big three. You are not bullish enough on the new 4 year console cycle that JUST began. $GME is beyond well positioned to capitalize, with a new cost structure that yields literally record profit margins from every sale.

[Flappr @flapprdotnet]

Anthony Fauci on Capitol Hill today:

[Sam Kovn @samkovn]

@s1ckox @SanderEDK @WootingKB @awekeys @s1ckox see what you have done?😂

[bad robot ventures @foxenflask]

Roberto is a very old friend of mine and I have learned more about the dollar-based fiat system from him than any economics class I ever overpaid for in college. It was a real treat to sit down with him and discuss $GME x $EBAY. Linking his Substack in the comments, audio in the quoted post.

A majority of his audience these days is non-GameStop folks, and so some of the conversation was structured to cater to them. GameStop is in the news more than it’s ever been, and I’m excited to get the word out on what’s REALLY going on at the company vs the public perception.

For those of you new to following my work, there’s a little bit on my background in the beginning that can help give some color to why I think the way I think. @peruvian_bull, you owe me a signed copy of the Dollar Endgame! Thanks for having me and getting the word out about GameStop.

[GameSir @mygamesir]

🎁Giveaway of Halo: Campaign Evolved & GameSir G7 Pro!🎁

Welcome back, Master Chief! To mark the launch of Halo: Campaign Evolved, we're giving away a game CD-key and the GameSir G7 Pro!

💽Prizes (1 Winner):

1× Halo: Campaign Evolved XBOX/PC CD-KEY(Base Game)

1× G7 Pro Mech White

How to enter:

❤️Like this post.

📀Follow @mygamesir

📡Repost

📅Ends July 31th

[Sam Kovn @samkovn]

@dhh Worth it

[bad robot ventures @foxenflask]

eBay motors and eBay watches is a very large part of $EBAY GMV (probably combined close to 40% of their $80B GMV). For both categories it’s all focused on the Collectibles side of watches and cars. And if you’re into either of these things you know how big these buckets are.

I love watches and cars. We have entered another era of Analog and both of these buckets shall overfloweth under right owner-operator for decades to come. Courtyard, a Power Packs competitor, recently introduced a category for luxury watches. It’s selling pretty well, you can see the numbers.

My bet is that Ryan can 1.5x that GMV in <3 years with a MUCH more profitable cost structure and thus higher margin revenue for eBay. For reference last year eBay’s revenue was $11.1B, captured from $80B GMV. Do the math for how that would translate to revenue and then profits.

Even his 1 year pro forma with $2B in cost cuts is super conservative, and doesn’t account for other massive expenses on eBay’s P&L (R&D, payroll, etc.). So it’s a no brainer for me. This board and management has seriously stagnated and their solutions have been limited to inorganic growth (acquisitions) and accounting tricks. Time for a change.

I will be voting for Ryan Cohen and $GME if and when a Tender Offer is presented directly to eBay shareholders to acquire eBay.

[Sam Kovn @samkovn]

@foxenflask Final edit @foxenflask ?

[👑Magnifishit🧻 @TheMagnifishit]

The media spent months telling investors GameStop’s $EBAY offer would require more than 1 billion new $GME shares. That’s the math when you divide the stock consideration by GameStop’s depressed standalone share price today.

That isn’t the rollover equity structure Ryan Cohen described.

Cohen said eBay shareholders would take half of their investment off the table in cash, then roll the rest into the combined company. He used roughly 60% ownership for eBay shareholders & 40% for GameStop shareholders as his example, then explained why the dilution could still be accretive to both sides.

I rebuilt a banker-style rollover model I reviewed in May based on these public disclosures & the structure Cohen has communicated. The model values the combined company first, then solves for the exchange ratio & required share issuance.

Using the $125 $EBAY offer as 50% cash and 50% NewCo equity, the base case produces:

• 648M new shares issued
• 40.9% ownership for legacy $GME holders
• 59.1% ownership for outside $EBAY holders
• $38.64 implied value per legacy GME share
• ~$18.1B of new debt, within TD’s highly confident letter for up to $20B

That’s over 500M fewer shares than what’s widely assumed & lands almost exactly on the 60/40 ownership split Cohen described.

The model shows a coherent path where the offer is financeable, reasonably balanced between both shareholder groups & potentially accretive despite the dilution.

We still don’t know the undisclosed tender terms. Every major assumption is editable so anyone can challenge the valuation, financing, synergies, costs & ownership mechanics here:

https://t.co/yXE3Gzcf6v

If the tender offer resembles this structure, it will shock the market. It shows a strong & credible offer that makes $GME far more valuable than what’s being assumed by the media today.

I’d welcome a hard review from anyone with public-company M&A, investment-banking or corporate-valuation experience, particularly around the value bridge, Sources & Uses and exchange-ratio logic. @ProfPaulNary @Bob_Bruner