GameStop let go of Boston Consulting Group (BCG) and the firm is now suing the retailer for $30 million in ‘unpaid’ fees.
BCG is now part of a scandal in a conflict of interest due to its connection to hedge fund and short seller Citadel.
GameStop said: “We do not believe it is in our stockholders’ best interests to pay the tens of millions of dollars sought by BCG, especially given their seemingly meagre impact on the company’s bottom line. We will fight this suit and are proud that GameStop no longer utilizes the likes of BCG for any services.”
BCG declined to comment.
Welcome to Franknez.com – today’s story is going to cover what corporate media isn’t discussing. Be sure to join the newsletter below so you don’t miss more content like this.
Let’s dive right into it!
Join the newsletter to become part of an activist group fighting for market transparency!
Receive weekly market news to stay up to date.
Chairman Ryan Cohen takes a jab at BCG
Chewy Founder and GameStop Chairman said on Twitter “the overpriced consultants at BCG are picking a fight with the wrong company.”
He later tweeted the following: “The only ones more useless than overpriced consultants are the ones that hire them”, referring to Citadel’s ex-BCG employees.
That’s right, numerous consultants over at BCG were later hired by Citadel.
Retail investors are flooding @BCG on Twitter for infiltrating GameStop under the old board before Cohen came in.
BCG was hired to bring GameStop out of its ‘slump’ when it was struggling, according to the lawsuit.
The consulting group says it spent “tens of thousands of hours” on the project and “overachieved” by creating more profit improvement opportunities.
“It is confounding that the high-priced consultants at BCG claim to have delivered hundreds of millions in value for GameStop during a period when share price, sales and debt were at perilous levels,” GameStop said in an emailed statement.
GameStop said it’s “proud” it no longer uses the consulting group’s services.
Was GameStop infiltrated by BCG?
It’s incredible how these consultants seamlessly ended up at GameStop only to join Citadel afterwards.
For starters, GameStop’s Vice President and head of Corporate Strategy & Analytics Jackson Speake was a consultant and project leader at BCG before joining the game retailer.
He also worked a Bain & Company, a company that would acquire failing businesses such as Toys R Us, and ‘bust them out’.
Except they wouldn’t bust them out, they would buy the companies using the struggling companies own credit.
This scheme is known as a Leveraged Buy Out (LBO).
Once Bain had control of the businesses, they would bring on their own board members and executives.
These executives would then pay themselves large bonuses prior to defaulting the business.
Hedge funds such as Citadel would then drive the company down to zero and keep all the money they made from short selling the stock.
Was this ring of manipulators attempting to take GameStop down?
Let’s dive deeper.
Citadel employees with BCG backgrounds
A few years ago, BCG was retained by the SEC due to concerns relating to organizational chain of command, the effect of high frequency trading, hiring and personnel practices, and oversight and reliance on self-regulatory organizations.
Retail activists did some research and found a variety of Citadel employees have ties to BCG.
One member even shows to work for both parties.
But GameStop is no longer doing business with BCG.
Retail investors are convinced there was an infiltration to bankrupt GameStop from the inside out.
What do you think?
Or is this all just one massive coincidence?
Leave your thoughts below.