US stores are the only profitable bits it looks like (~$153M op. inc. T9M-Nov25). Very impressive considering it doesn't include final X-mas shopping and compared to T9M-Nov24 of -$42M. FY24 US ended at -$2M. Assuming he 'only' matches Q4-24 performance of +$40M (seems unlikely given 2025 performance), US would be ~$200M operating income for 2025.
Best Buy (per seeking alpha) trades ~8x-9x EV/EBIT. At 6x-9x $200M gives $1.2B to $1.8B for GME USA.
If he drops AUS/EUR it will help profits. Per the financials, proceeds from divestitures were -$3.4M at Nov25 and $0 at Nov24. Assume he can get away without too much of a dent divesting the non-US businesses.
So let's say $5B net investments, $1-2B for US GME and ~$10B market cap meaning optionality costs $3-4B. So basically 30-40% of your money would be 'on risk' so to speak.
Downsides for me include the bitcoin position and comments like "If it works, it’s genius. If it doesn’t work, then, you know, it will be totally, totally foolish". A bit concerning. Feels closer along the spectrum to Musk than Buffett. Which is fine. It just is what it is.
My conclusion would be that there is no logical way to price the 'option' of Cohen. Is it 'worth' paying $4B to have this guy invest $5B of your money + whatever clever retail/deal making he can do? No sensible way to do that math.
I think Burry's comments in Jan are the thesis. Burry 'believes' in Ryan, who is young and is going to work for a long time. Period. That's the deal.
If you believe this guy is good at building retail/consumer businesses and will keep all his efforts under the GME banner, then it's probably worth it. He's obviously skilled.
It might be easier to reverse the thinking. Assume you agree with my back-of-napkin math and bought a 10% position size.
Would you lose sleep betting 4% of your capital on Cohen doing something smart over time?
Though I would argue you have a retail business worth $1-2bn and 70-80% "at risk" for Cohen's capital allocation plans. It seems likely they'll use all but a small buffer to pursue a large acquisition(s), so hard to consider the cash pile at face file.
Given the near impossibility to predict what this will look like a few years into the future, I'd rather buy LEAPS or a call spread or something (even if Cohen is a smart / trustworthy guy). That's just my preference though.
US stores are the only profitable bits it looks like (~$153M op. inc. T9M-Nov25). Very impressive considering it doesn't include final X-mas shopping and compared to T9M-Nov24 of -$42M. FY24 US ended at -$2M. Assuming he 'only' matches Q4-24 performance of +$40M (seems unlikely given 2025 performance), US would be ~$200M operating income for 2025.
Best Buy (per seeking alpha) trades ~8x-9x EV/EBIT. At 6x-9x $200M gives $1.2B to $1.8B for GME USA.
If he drops AUS/EUR it will help profits. Per the financials, proceeds from divestitures were -$3.4M at Nov25 and $0 at Nov24. Assume he can get away without too much of a dent divesting the non-US businesses.
So let's say $5B net investments, $1-2B for US GME and ~$10B market cap meaning optionality costs $3-4B. So basically 30-40% of your money would be 'on risk' so to speak.
Downsides for me include the bitcoin position and comments like "If it works, it’s genius. If it doesn’t work, then, you know, it will be totally, totally foolish". A bit concerning. Feels closer along the spectrum to Musk than Buffett. Which is fine. It just is what it is.
My conclusion would be that there is no logical way to price the 'option' of Cohen. Is it 'worth' paying $4B to have this guy invest $5B of your money + whatever clever retail/deal making he can do? No sensible way to do that math.
I think Burry's comments in Jan are the thesis. Burry 'believes' in Ryan, who is young and is going to work for a long time. Period. That's the deal.
If you believe this guy is good at building retail/consumer businesses and will keep all his efforts under the GME banner, then it's probably worth it. He's obviously skilled.
It might be easier to reverse the thinking. Assume you agree with my back-of-napkin math and bought a 10% position size.
Would you lose sleep betting 4% of your capital on Cohen doing something smart over time?
Your thought process makes sense.
Though I would argue you have a retail business worth $1-2bn and 70-80% "at risk" for Cohen's capital allocation plans. It seems likely they'll use all but a small buffer to pursue a large acquisition(s), so hard to consider the cash pile at face file.
Given the near impossibility to predict what this will look like a few years into the future, I'd rather buy LEAPS or a call spread or something (even if Cohen is a smart / trustworthy guy). That's just my preference though.