Today’s 30%+ selloff in DKS is way overblown because investors are overly punishing the Foot Locker segment for a bad quarter.
DKS bought Foot Locker in 2025 by issuing 9.6 million shares at $209.61 for about $2 Billion in proceeds. This raised fully diluted share count from 81 million shares to 90.6 million shares. Some cash was also paid to Foot Locker shareholders so the total acquisition price was around $2.5 Billion.
**What is DKS worth today?**
At today’s **$126.61/share**:
**$126.61 × 90.6mm fully diluted share count = $11.52B market cap**
So the entire combined DKS + Foot Locker equity is currently worth only about **$11.5B**.
Legacy shareholders now own roughly:
**81M / 90.6M ≈ 89.4%**
of the combined company.
Foot Locker recipients own roughly:
**9.6M / 90.6M ≈ 10.6%**
Therefore, if legacy DKS were worth the same **$209.61/share** immediately before the acquisition announcement of Foot Locker, the legacy DKS shareholders’ original equity value was approximately:
**81M × $209.61 = $16.98B**
If Foot Locker were now worth $0, but nothing had happened to the intrinsic value of legacy DKS, that $16.98B would now be spread over \~90.6M shares:
**$16.98B / 90.6M = \~$187/share**
Then account for the \~$223M cash paid:
**($16.98B − $0.223B) / 90.6M = \~$185/share**
So:
**Foot Locker = $0 scenario**
**DKS ≈ $185/share**
versus **\~$126.61 today**.
That’s roughly **46% upside**.
And remember: this assumes DKS gets **absolutely nothing** for Foot Locker.
**What today’s price implies**
At $126.61, combined DKS equity value is \~$11.52B.
Compare that with our adjusted \~$16.76B legacy DKS equity value:
**$11.52B − $16.76B = -$5.24B**
On this very simplified framework, the market is effectively pricing in roughly **$5.2B of value destruction** relative to the pre-deal valuation of legacy DKS.
That’s vastly greater than the $2.5B acquisition price.
TLDR: Buy when others are fearful (and being very irrational when it comes to fundamentals).
Long Dicks.
