Sears Revenge

To hell with the left and the right. Stop delaying Teddy. 🦋🧸

what if the ace up the sleeve for $GME is not about the actual acquisition, but what happens after the acquisition? what if it is Delaware Law Title 8, Chapter 1, Subchapter IX. Merger, Consolidation or Conversion. specifically §251(g)? like many I was surprised to see RC doing the media tour and for the first time, hyping how big their plans will be. I mentioned before that a likely explanation could be they are doing a roadshow for an upcoming traditional bond offering. I also couldn’t help but worry when I read some snippets: “it's gonna be really big. Really big. Very, very, very big," Cohen said of the size of the acquisition.” “this is something that really has never been done before within the history of the capital markets.” “it has the "potential to make [GameStop] worth several hundreds of billions of dollars.” ..because no matter what the Board was planning, the market could make this the largest sell-the-news event in history to try and curb their momentum and sentiment around the pivot of GameStop into a holding company. why would big dog do that? why would he not say basically anything for 5 years then suddenly risk shooting himself in the foot by making grandiose claims about their first acquisition? lets not overlook that in the CNBC article he claims this one acquisition could propel the market cap of the company to the extent his entire pay package vests.. it got me thinking about why he would be so confident. then I found §251(g): “Delaware General Corporation Law Section 251(g) allows a corporation to reorganize into a holding company structure without requiring a stockholder vote. This statutory provision facilitates mergers with a wholly-owned subsidiary, ensuring the holding company has the same charter provisions as the original corporation, often used for corporate restructuring or, historically, for adopting anti-takeover measures.” emphasis mine. it is mainly used to create a new, top-level holding company where the original parent corporation used to be. That old parent co becomes a subsidiary and shareholders receive identical shares in the new holding company. “Section 251(g) facilitates a holding company reorganization merger where outstanding shares of the original corporation are automatically converted into equivalent shares of the new holding company upon the merger’s effective time, provided all statutory conditions are met (e.g., identical rights and no tax recognition). This conversion is seamless and does not require surrendering or recalling physical certificates or shares,..” hang on.. I know exactly what I thought of when I read that. do you remember this? this sure provides a convenient explanation. oh, I can already hear the naysayers.. upon the merger's effective time. do you now remember what happened immediately before September 2024? the Board closed their credit facility and less than one month later, a pre-negotiated, pre-settled agreement was filed by the FTC. I wrote at the time that I believed the Company applied to the FTC for a pre-merger certificate, hence why the settlement came out when it did and that the issuance of the certificate occurred after the second, 30-day review period following the filing of RC's settlement of the FTC violation. that is why he tweeted "yolo" exactly 60 days after the application for the certificate, because he got it. OK back on topic. guess what else? if they want to, a company can reissue shares under §251(g) as tokenized shares even if they weren’t tokenized before, as long as the tokenized shares are identical in all the important respects like rights, voting powers, etc. to the original shares. this is explained in §251(g)(2). “Since §251(g) allows for a holding company reorganization where the new parent issues shares that mirror the originals, the holding company can adopt a blockchain-based stock ledger for its issuance process. This doesn’t violate the “identical” requirement because the form of record-keeping (traditional vs. blockchain) is administrative, not substantive—much like switching from certificated to uncertificated shares, which Delaware law expressly supports.” hang on now.. do you remember the S-3 that was filed in May 2024, defining digital assets inside of the sale agreement contract between GME and Jefferies? for their share offering? GameStop’s current corporate structure looks like this: GameStop Corp (parent) holding company → GameStop Inc (subsidiary) that manages retail operations. the shares are issued for ownership of the parent company. important to understand that the legacy business is managed by a subsidiary. what if in the future GameStop wanted to maintain the brand identity for their retail business as the premier destination for how to spend your leisure time, but wanted to have a new name for their investment behemoth diversified holding company.. like Teddy? they could: • acquire a company that they find undervalued or owning an asset they would want; • place it as a subsidiary of GameStop Corp; • perform a Section 251(g) corporate reorganization; • and name it whatever they want. then it becomes Teddy (probably) → GameStop Corp → GameStop Inc. you may be wondering why? ..well, tell me why shares of GME were labelled new class in 2024? kidding aside, this allows GameStop Corp to keep its current roles: strategic oversight, capital allocation, governance.. the investment policy.., and allows a new parent corporation to be formed to hold all of the acquisitions made by a dying, brick and mortar retailer-turned-investment fortress, managed by big dog and friends. and! it does not require a shareholder vote. that could explain Section 4 of the warrant agreement, specifically why they chose to include legal definitions around a “Share Exchange Event” in the event of a reorganization: it would explain the “new class” anomaly observed in September 2024 (or it was a private placement); it would explain why the ATM agreement would require GME and Jefferies to have explained digital assets in a contract only to do with selling of their shares; and lastly, it could explain why RC is so confident in his interviews with the news media. talk about exciting times. n.b.—this is just my personal opinion and fun speculation.

How long can they preserve the NOLs? Thoughts

#GME #Gamestop #GMEWS #Warrants project genesis, why i believe GameStop will extend the warrants, I’ve spent a considerable amount of time studying the warrants, their original agreement, GameStop’s recent capital allocation decisions, and the market mechanics surrounding GME WS. The closer we get to October 30, the more convinced I become that extending the warrants, or introducing an alternative arrangement that preserves their value, makes considerably more sense than allowing them to expire. GameStop distributed approximately 59.15 million warrants in October 2025, each entitling its holder to purchase one share at $32. Full exercise would generate approximately $1.89 billion in additional cash for the company. The prospectus explicitly identified investments and potential acquisitions among the intended uses of those proceeds. At issuance, GME was trading around $25. The $32 strike was therefore approximately 28% above the prevailing share price, making the financing contingent on substantial appreciation within a relatively short period. If the sole objective was to raise capital before October 30, why establish such an ambitious threshold? I think the more compelling explanation is that management wanted to establish a premium-priced source of contingent financing while giving shareholders an opportunity to participate in future appreciation. An extension would preserve that arrangement, allowing GameStop to raise capital at the original $32 exercise price while giving its broader strategy more time to develop. And that broader strategy has evolved considerably since the warrants were issued. GameStop made a $55.5 billion proposal to acquire eBay, subsequently accumulated a 9.8% equity stake worth approximately $4.9 billion as of August 1, and reported approximately $5.1 billion in cash, cash equivalents and marketable securities. This is a company actively deploying capital and pursuing transactions on a scale that would have been difficult to imagine just a few years ago. Another potential $1.89 billion is meaningful in that context. It could replenish liquidity, reduce reliance on external financing or support subsequent transactions. The proceeds are obviously contingent on exercise, but preserving access to that capital has strategic value even if GameStop doesn’t need the money immediately. The company’s recent financing decisions make this argument even stronger. On July 7, shareholders approved increasing authorized Class A shares from 1 billion to 2.5 billion, providing substantial additional capacity for future equity transactions. Management subsequently negotiated the retirement of approximately $1.4 billion in convertible debt through an exchange involving approximately 55.5 million newly issued shares and $358.4 million in cash. What’s especially interesting is that the original exchange contemplated settlement entirely in stock. GameStop subsequently amended the agreement, substituted cash for part of the consideration and reduced the number of shares issued. That tells us something important about how @ryancohen approaches capital allocation. He’s willing to issue substantial equity when the transaction makes economic sense, but he’s equally willing to revise the structure when circumstances justify it. I therefore find the argument that management would refuse to extend the warrants simply to avoid dilution, or even dumber, that time “ran out,” rather unconvincing. An extension creates no immediate share issuance, and the original $32 exercise price would allow GameStop to raise additional capital at a premium to the share price prevailing when the warrants were distributed. There is an economic cost to keeping potentially dilutive claims outstanding, but GameStop has repeatedly demonstrated that it evaluates dilution in the context of what the company receives in return. 1/