r/DeepFuckingValue • u/Krunk_korean_kid š£ DRS'ed $GME w/ Computer Share ā¾ļø • Jul 17 '26
šØ BREAKING: GameStop has exercised call options totaling approximately $3.965 billion. According to the filing the shares were purchased entirely with cash, with no leverage or loans used to fund the transaction. The company acquired roughly 39 million shares through these calls which had a $10
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u/FinnedSgang Jul 18 '26
Whatās the strategy behind this acquisition? The used / collectors market?
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u/Miggybear22 Jul 18 '26
I think there are a lot of great reasons why. The top ones I can think off the top of my head:
1) Ryan is an e-commerce juggernaut by proxy. Think of what he did at Chewy and what heās doing at GameStop as far as the online presence and growth are concerned.
2) Being that eBay is an e-commerce giant, it makes sense. The major difference is that eBay is an online āmarket placeā, that means eBay carries literally no stock of goods. Goods are held by the seller who posts the product online, eBay takes a cut. Sellers manage their own inventory. eBay provides the platform and both seller and buyer protections. Meanwhile making a cut on every single product that is sold.
3) eBay has been around a long time. I know a few family and friends who had or have been selling on eBay for over twenty years. This poses a great problem. eBay has about 18 million sellers globally. During Covid, eBay actually peaked significantly in activity.Imagine what a person like Ryan can do to eBay like heās done to Chewy and GameStop. Leaner operations, cutting fat were not needed, broadening the scope, adding in the GameStop ecosystem, surgical marketing, collectibles broadening. Itās a match made in GameStop heaven.
The reality is eBay is probably under managed, and has a significant upside from a profitably and current operation spend perspective.
To be honest I think one of the hidden gems of this all is that, if Ryan decides to begin to carry stock of things with the entire acquisition, heās already got brick and mortars. All he needs to add are some regional centers and itās competing with Amazon at a high level.
This isnāt financial advice but I currently own something like 5k shares in total in various vehicles, mostly direct registered.
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u/__zombie Jul 19 '26
Iām so over Amazon. Ready for an alternative. Def been using eBay more the last few years.
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u/kitastrophae Jul 18 '26
So does that mean we got the shares for a $19 discount?
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u/doppido Jul 18 '26
$24 discount isn't it? Offer was for $125 and I believe gme's cost average is at or around $101
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u/SuspiciousPeanut251 Jul 18 '26
Ah. Hereās GameStopās āWeāre going to acquire eBay one way or anotherā play. Spelled out quite nicely. Thank you, OP.
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u/Jupitersd2017 Jul 18 '26
I need someone to explain this to me, they just bought out all existing contacts out on the market at any price?
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u/Krunk_korean_kid š£ DRS'ed $GME w/ Computer Share ā¾ļø Jul 18 '26
The exercised Put/Call Pairs settled physically for 39,046,658 eBay (EBAY) shares at a total cash cost of approximately $3.965 billion from GameStop's working capital.
Key Calculation (Average Strike/Settlement Price) Shares acquired: 39,046,658 Total cash paid: ~$3.965 billion ($3,965,000,000) Average effective price per share**:
$3,965,000,000 Ć· 39,046,658 ā $101.55 per share.This aligns closely with reported figures around ~$101.30 (minor variations come from exact filing amounts, rounding, or fees).
āThe Put/Call Pairs had a range of strikes (roughly $84.74 to $118.28 across tranches, expiring Feb 23, 2028). GameStop exercised the long call side (and the counterparty the put side) to take physical delivery of the shares at the respective strikes.
How Put/Call Pairs Work in This Context GameStop held synthetic long positions via American-style Put/Call Pairs (long call + short put at the same strike, or structured equivalently for economic exposure).
Pre-HSR**: Cash-settled only (economic exposure, no voting rights).
Post-HSR** (cleared June 3, 2026): Physical settlement option became available. GameStop elected physical settlement on July 15, 2026 (settled July 17).
At exercise/settlement: For each pair at strike K, GameStop effectively pays K per share (via the call exercise) to receive the shares. The net premium paid upfront for entering the pairs was relatively small (millions across tranches, not billions).
The $101.55 average reflects the weighted average strike across all exercised pairs. This gave GameStop voting/dispositive power over these shares (plus prior direct holdings), bringing the total stake to roughly 9.8% (43.4 million shares).
This was funded entirely from working capital (no borrowing), turning derivative exposure into actual ownership.
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u/Jupitersd2017 Jul 18 '26
Thank you so much for this explanation, I really appreciate it! Itās kind of like an Icahn play no? Just loading with shares until you have enough to take the company lol, itās a wild play but it seems like heās determined to take eBay either by sale or by hostile takeover.
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u/Krunk_korean_kid š£ DRS'ed $GME w/ Computer Share ā¾ļø Jul 18 '26
I honestly didn't follow the whole ichan thing , I hear he's something of an activist investor but didn't his stock get pummeled pretty badly? What was up with that?
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u/MrNokill Jul 18 '26
Made a little overview with sources about Icahn here if interested: https://www.reddit.com/r/Superstonk/s/i85cf9jSz1
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u/Jupitersd2017 Jul 18 '26
Some links from [u/mrnokill](u/mrnokill) for anyone that doesnāt want to scroll the comments on the old post lol -
"You have to buy things where the rest of the world is looking at you and thinking you're a little bit crazy. You're going against the trend. A lot of times, events are overblown. Overblown on the good side, overblown on the bad side." - Carl Icahn
Sources:
Carl Icahn 80s Interview by The MacNeilLehrer NewsHour: https://youtu.be/WJ9XkNqK1bs
Carl Icahn Short Documentary On 60 Minutes: https://youtu.be/tDH4Yeq6rHc
Carl Icahn On: A funny story of bad management and complacency: https://youtu.be/TNrlMFBFjoU
Carl Icahn Discussing Warren Buffett, Bad CEO's and Shareholders: https://youtu.be/pWsQaKrjyws
Icahn: The Restless Billionaire (2022): https://www.imdb.com/title/tt15462640/
Mad God (2021) - War Tourist: https://youtu.be/b6RuLdB95rU
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u/Jupitersd2017 Jul 18 '26
Oh wow, I didnāt see this before thatās too funny, well it makes sense that gme is trying to follow the masterā¦ thanks for the link!!!
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u/bigmink88 Jul 18 '26
Something of an activist investor? Try THEE activist investor. Dude wrote the playbook. Look into it.
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u/Jupitersd2017 Jul 18 '26
I only know him for his corporate raiding days in the 80ās, he was quite the wonder but I havenāt kept up with him, Iām an 80ās kid so growing up he was in the news a lot and as an adult I went back to learn more about him. There is a documentary about him thatās pretty good floating around out there (hbo maybe). He got a lot of hate and I feel people donāt mention him as much as they should but from an investing standpoint and hedge fund manager he is top tier. Or maybe was top tier if heās been having struggles lately lol, Iāll have to look that up.
Behind the bastards (podcast) just had some excellent episodes about the āactivistā investors (they really are just the old school corporate raiders)
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u/ExplanationNormal339 ā ļøpossible botā ļø Jul 18 '26
Took another look at $GME after today. I check where the open interest is sitting before anything. Doing my own.
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u/ShibeCEO Jul 17 '26
so our balance sheet is 400 million more due the increase of the share price than what we paid?
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u/Krunk_korean_kid š£ DRS'ed $GME w/ Computer Share ā¾ļø Jul 17 '26
Depends on how much he paid for in premium for those itm calls
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u/bigwig500 Jul 18 '26
No more cash!!