GameStop Corp. (NYSE: GME) closed at $27.15 on October 14, 2026, up about 43% from $18.97 on September 2, when value investor Colin King (@valuedontlie) argued the retailer traded near 2.7x EV/EBIT once its cash and eBay stock are netted out. On October 15 he revisited the call as CEO Ryan Cohen kept buying shares in the open market. The next hard date is October 30, 2026, when GameStop's $32 warrants expire.
This is journalism and commentary, not investment advice. We hold no position unless stated.
Key facts
- Ticker and exchange: GameStop Corp., GME, New York Stock Exchange.
- Situation type: A shrinking video game retailer holding billions in cash, a 9.8% eBay stake, and an unresolved bid for eBay.
- The call: Colin King's September 2, 2026 math put GameStop at about 2.7x EV/EBIT if all convertible debt converts to stock. We log it as a long.
- Balance sheet (as of August 1, 2026): $5.1 billion of cash, cash equivalents and marketable securities, $0.3 billion of digital assets, and about 43.4 million eBay shares worth about $4.9 billion.
- Insider buying: Form 4 filings show Cohen bought about 4.1 million GME shares for about $97 million between September 10 and October 13, 2026.
- Catalyst: Warrants with a $32.00 exercise price expire at 5:00 p.m. New York time on October 30, 2026.
- Main risk: Second-quarter net sales fell 18.7% year over year, and a large share of the value sits in one stock, eBay.
Is GME a good bet right now?
On King's math, the market was paying very little for the stores in September.
His post assumed 593 million shares with all debt converted, a $19 share price, and "$10b net cash & ebay stock." That left about $1.3 billion of enterprise value against roughly $480 million of trailing GAAP EBIT from the retail business.
The price has moved since. Re-running his own inputs at the October 14 close of $27.15 gives an enterprise value near $6.1 billion, or roughly 12.7x the same $480 million of EBIT. That is the main tension in the call today.
Why are investors bullish on GameStop?
- Profit turnaround. Second-quarter operating income was $160.2 million, the highest second quarter in company history, and gross margin rose to 43.7% from 29.1%.
- Collectibles mix. Collectibles sales grew 57% to $356.3 million, or 45.1% of net sales.
- Guidance. GameStop raised its fiscal 2026 adjusted EBITDA Outlook to more than $650 million.
- Insider buying. Cohen's October 13 Form 4 shows 844,130 shares bought at $26.75 and $27.00, taking his direct stake to 42,492,652 shares.
- Lease flexibility. King added on September 9 that "$GME has 50%+ leases expiring in FY2026 and another 24% in FY2027."
Who's making this call and why?
Colin King writes a stock newsletter and describes his approach as "All value. No advice." His September 2 post was framed as a question and ended "EV/EBIT at 2.7x." On October 15 he wrote, "$GME up 50% since this post as insiders scoop up shares hand over fist." In a September 11 reply, he called GameStop "more like an activist SPV for a single, yet-to-be-announced idea" with a retail business attached.
Track record. In our tracking, Colin King is 11-8 (a .579 win rate) on 19 calls scored at 180 days against the S&P 500, with an average edge of +35.14 percentage points, ranking 4th on the career table. One outsized winner lifts that average; his median edge is +4.18. See the scoreboard.
Another supporter: @foxenflask, an account run by a self-described private-equity professional with his own fund, posted on September 29: "My current base-case valuation for GameStop is approximately $32 per share." He applies 15x to about $618 million of normalized operating earnings, then adds the eBay stake, about $1.9 billion of pro forma net cash, and digital assets.
The cash figures differ because King assumes the remaining convertible notes, about $2.8 billion after the September 3 exchange, turn into shares. The $1.9 billion figure subtracts that debt instead.
Who disagrees?
- EBay's board. On May 12, 2026, eBay rejected GameStop's takeover proposal, calling it "neither credible nor attractive," citing financing uncertainty and GameStop's governance.
- Concentration risk. 24/7 Wall St. pointed out that the eBay gain is unrealized: "The unrealized gain exists only on paper."
- Shrinking sales. Second-quarter net sales fell to $790.2 million from $972.2 million.
- Dilution. About 59 million warrants could raise up to about $1.9 billion if exercised, and GameStop's own release warns that warrant exercises "may depress our stock price."
- We found no credible X account posting a reasoned GME short case in the last 60 days; most bearish posts were jokes.
What are the key facts to verify?
- GameStop's second-quarter fiscal 2026 release and 10-Q: cash, the eBay stake, warrant terms, and the $2.0 billion buyback authorization (no shares repurchased as of August 1, 2026).
- Cohen's October 13, 2026 Form 4.
- The eBay share price. Every $10 move in eBay changes the stake's value by about $434 million.
- Any change to warrant terms before October 30, 2026.
What would prove it right or wrong?
Signals the long is working:
- Holiday-quarter results support the more than $650 million adjusted EBITDA Outlook.
- Cash and eBay value hold up while buybacks or warrant cash strengthen the balance sheet.
- GameStop turns the eBay stake into a clear gain, a partnership, or a sale.
Signals it is failing:
- Sales keep falling faster than costs.
- EBay stock falls, or the stake is spent on an expensive deal.
- New share issuance outweighs Cohen's buying.
This is journalism and commentary, not investment advice. We hold no position unless stated.