>Not growing revenue

Not growing revenue would be one thing, they're shedding revenue at pace - 50% decline since 2020.

> Shareholders seem to agree

First, it's a meme stock. The market can remain irrational for long periods. Another way to analyze it - almost all of the market cap of ~$10b is the $9b in cash. The shareholder pricing tells you they value the business at it's cash assets.

Gamestop's business of physically selling video games, consoles, etc is a dying/dead industry. Nothing can change the trajectory of the market that is almost completely disappeared.

It's a Blockbuster or Tower Records, a dead business running on fumes and memestock valuation.

A strong cash position business like that is effectively a finance sort of business, in other words, exactly the kind well positioned to go conduct an LBO.

> A strong cash position business like that is effectively a finance sort of business

You are conflating companies that make a lot of cash (and therefore can afford debt service) to a company that has limited cash flow, but has a large pile of cash.

The shareholders would be best served by a special dividend of the cash. Management has shown zero ability to grow a business.

In this case, the shareholders don't want a special dividend and prefer to own a company that has a strong cash position. There is nothing at all wrong with shareholders choosing that.

There are plenty of other stocks to invest in if one wants a highly-leveraged company that is trying to grow really fast.

Tightening your belt is a good thing. No disagreement there but it has a hard limit. You can't just keep tightening the belt and growing profit, at some point you have to start revenue expansion again and from what I've seen Gamestop has no way to do that.

At $2.50 they had massive amounts of debt they couldn't service and a very real chance of going out of business. Then through pure luck they became a meme and were able to extract $10b from investors so of course they are worth more today. There is no growth story though so as meme investors get bored and move on it will move back down to it's asset value unless they find a way to grow again.

The meme investors can stay irrational long before gamestop gets a growth story. If they haven't given up on their get rich quick scheme that's lasted over five years now, I really don't think they're going to jump ship now.

The sad part is that gamestop is offering 55 billion, yet only has 9 billion in cash. The only way they come up with that much capital to buy ebay is to dilute the existing shareholders to a point that "to the moon" will just be moondust.

I was assuming it was going to be an LBO? Surely they don't plan to raise the money in cash.

I suspect Cohen has a novel financial instrument in mind. After all, at some point someone invented the first LBO.