>He obviously has faith that, long term, the value of the combined company can substantially grow.
replyDepends how much of them he has before and he will after, it might still be worth diluting if difference is vast.
Also, why long term if short term could also do?
My take? The strategy is like a contractor fixing up houses. GameStop was the crappiest house on the block. He’s fixed it up and is using it as collateral to take out a loan and buy the dilapidated mansion next door (eBay). He’ll keep going until he’s gentrified the whole neighborhood using the value of the current business as collateral to buy the next. He wants to sell only when the value of the entire gentrified neighborhood reflects market rate for the work he's put in.
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