Gamestop and the tides: How a bunch of smooth brains caused the driest flood in history

Let me start off by saying that i bought into this stock in the first week of January 2021. I’m still here. I love this community. Some of you are genuinely brilliant. Smarter than I’ll ever be. But holy fucking shit… Some of you are the smoothest, most weaponized, regarded motherfuckers I’ve ever encountered. The amount of times I’ve read: “We have $10B cash and our market cap is only $9.5B!! We trade under book value!!!” No, you beautiful fucking primates. It’s 👏 cash 👏 minus 👏 liabilities. Not cash. **Net** cash. There’s a fucking difference. Our net cash isn´t even close to $10B. And don’t even get me started on dilution. For YEARS this company traded at valuations that made absolutely no fucking sense fundamentally. It was objectively expensive. Ryan Cohen looked at a stock trading way above any reasonable fundamental valuation and basically said: “Yeah… I’ll sell some of that.” Good. That’s exactly what he should’ve done. He sold overpriced paper and turned it into billions of dollars in cash. That gave him the financial freedom to turn this company around. The fortress balance sheet we have today exists because of those offerings. Do I like another 75 million shares? No. Do I think it magically means every share is worth 16% less? Also no. The company isn’t just printing shares and giving them away. It’s getting something in return. Just like with the potential accretive dilution for the eBay deal, we may own a smaller slice of the cake… but **the cake is also getting a whole lot bigger**. Whether that’s a good deal depends on **what they get in return and whether the value they create from it is greater than what they gave up**. To quote Larry: GameStop is converting debt into equity “Because they value the upside potential of owning the equity more than the downside protection of owning the debt.” All of the bots crying over a sub-20% dip seem to have forgotten we were trading around $12 just two years ago and what we have been through. I watched the most absurd price action I’ve ever seen, retail going toe-to-toe with some of the biggest financial institutions on the planet, bots flooding the gambling sub with every distraction ticker imaginable, the buy button disappearing, politicians pretending to care and everyone promising investigations, then listened to absolute fucking silence. I’ve seen DD gods rise and disappear. I’ve survived every “Tomorrow is THE day”, T+whatever, technical analysis, quad witching, CAT, CUSIP, Splividend, „trust me bro”. Every hype date that turned into the biggest nothingburger known to mankind. And I bought every. Single. Fucking. Dip. From $400 pre-split all the way down to $40. There was this undeniably weird price action. They hammered it down to around $40 after the sneeze, kept it there for weeks, and then out of absolutely fucking nowhere it ripped back to $350 without any news. These random violent spikes kept happening over and over again. It always felt like they were trying to sell us the story that the shorts had closed, despite the SEC showing there wasn’t anywhere near enough short seller buying volume during the sneeze for that to have happened. That’s why I held. And that’s why many of you held. https://preview.redd.it/c7g9egd47sih1.jpg… I still believe there’s a position somewhere that eventually has to be unwound. Maybe it’s a massive short position, maybe it’s something more complicated than that. And maybe they can keep kicking the can down the road for years. The system is complicated, corrupt as fuck, and I honestly have very little faith in the U.S. market. If shit really hit the fan, I wouldn’t be surprised if they’d just pull the buy button again and call it a day. But if there will never be the violent, market-breaking squeeze we dreamed about, will it be because the system is corrupt? Or because Ryan diluted us? I don’t know. What I do know is that there’s been some seriously shady shit surrounding this stock for years. And I still hope it eventually blows up in their faces. But not only did it feel like there was not enough pressure on them for that to happen, it’s also become painfully obvious that **Ryan was never here for the squeeze**. He was here to **build a company.** Ryan’s only goal has been to run this company efficiently. He streamlined the business, cut the fat, and turned a dying brick-and-mortar retailer into a profitable company with a fortress balance sheet. And I know that **hands-on leadership, skin in the game, and actually giving a shit about the company instead of paying overpriced consultants to piss money against the wall** are things worth investing in. The only problem is that we’re the smoothest, crayon-eating, financially self-destructive pack of apes on this planet, so we just kept buying anyway. I’ve listened to crying smooth brains telling me the stock was “undervalued” while we were trading at valuations that would’ve made most companies blush. Ryan did an amazing job turning this company around. The problem was that the stock price didn’t reflect reality very well because for years we were absurdly overvalued, while we closed unprofitable stores and revenue declined. That was Ryan lowering the tide before trying to raise the fleet. But when we became profitable and the tide started to rise, our boat was parked on **a fucking mountain**. Now the tide is finally coming back in, and this time the boat is actually floating on fundamentals instead of pure fucking hype. Our earnings finally look solid. Our PE is below 20. For the first time in years, you can actually argue GameStop is being valued somewhat rationally. And now we’re talking about **eBay.** Collectibles, and maybe even physical assets in general, are slowly becoming more financialized. The winners in physical assets may not only be the companies selling the items. They may be the companies controlling the trust layer and infrastructure around buying, selling, authenticating, and reselling those assets. Uber isn't a taxi company, Meta isn't a content creator, Airbnb isn´t a hotel company. They built platforms that became the infrastructure connecting supply and demand. If GameStop wants to become a serious marketplace for authenticated physical assets, acquiring existing infrastructure could accelerate that vision instead of building everything from the ground up. GameStop has reached a point where simply **cutting costs isn’t enough** anymore. The fat is gone. The business is lean. Retail growth is naturally limited. The next step is **making the cake bigger.** Ryan is willing to buy the biggest cake he can get his hands on and do exactly what he did with GameStop: trim the fat, improve the business, and unlock value. And it turns out he’s pretty damn good at cutting fat. He took this company from a dollar-per-share, dying brick-and-mortar retailer to a leaner and profitable company that´s worth billions. The sad part is that because of our absurd valuation, it happened in the most unceremonious way imaginable. But he did it. And he wants to do it with eBay, even though it´s an ambitious and risky plan. But if you want to grow, you´re going to take risks. Some will work, some won´t. Whether we buy eBay, have some sort of partnership or do something entirely different: If you´re actually trying to build something, you´re going to take risks. And not every swing is going to be a home run. Ever heard of Amazon Auctions or Amazon zShops that launched in 1999? Or that when Steve Jobs left Apple and found NeXT in 1985, the first two computers they launched didn´t sell? There are plenty of examples proving that if you want to be successful, you **have to take some swings. That is part of the game.** The NFT marketplace was a fucking disaster. Powerpacks look really promising. I´ll take a CEO who´s willing to take swings a thousand times over a CEO who would´ve just kept running GameStop the way it was being run before Ryan came in, trying to survive on selling used video games. And here’s the beautiful part: GameStop isn´t trading at the ridiculous valuations it enjoyed a few years ago. So every bit of unnecessary fat Ryan cuts from eBay or any swing Ryan takes that actually hits, has a much better chance of actually lifting our boat this time. And the possibility that this incoming tide finally puts some real, uncontrollable pressure on those dumb fucking stormtroopers and ends up squeezing them slowly and painfully is just the **cherry on top.** We spent years buying a company that was objectively expensive because we believed in what it could become. The funny thing is, this is exactly the kind of price action many of us **have been waiting years for**. A company with solid earnings, a reasonable valuation, revenue growing again for the first time in years, and a management team willing to take aggressive swings to make this company grow, while the market suddenly decides it’s all worth less. Maybe we will take a swing and miss. Or maybe, in a few years, we’ll look back at it as one of the last chances to buy before the tide finally came back in and lifted our boat after years of being stranded on dry land. TLDR: My tits are jacked and i bought more. **Disclaimer:** English isn’t my first language, so I used ChatGPT to help me phrase and proofread this post. The thoughts, opinions, and arguments are my own.