GameStop Corp. (NYSE: GME) has been sued by Boston Consulting Group for not paying about $30 million in consulting fees, Bloomberg reported Wednesday.
What Happened: In its complaint filed in the Delaware federal court, BCG said it had been hired by GameStop in 2019 and had not received fees for its work in setting the videogame retailer on a “more sustainable path” more than two years ago, as per the report.
However, GameStop reportedly said it would fight the lawsuit since it was not in the best interests of its stockholders to pay the money sought by BCG.
Why It Matters: The news about the lawsuit comes even as GameStop’s shares surged in Tuesday’s extended trading after chairman Ryan Cohen raised his stake in the videogame retailer.
Cohen is striving to move GameStop into more e-commerce growth initiatives rather than being just a brick-and-mortar retailer. However, the turnaround strategy under Cohen has so far failed to change the company’s underlying fundamental business metrics.
Earlier this month, GameStop reported a loss for the fourth quarter, while sales beat analysts’ estimates.
GameStop — a darling of the Reddit investor forum r/WallStreetBets and one of the most heavily shorted stocks along with AMC Entertainment Holdings Inc. (NYSE: AMC) last year — continues to see high interest from retail investors.
Price Action: GameStop shares closed 30.7% higher in Tuesday’s regular trading session at $123.14 and rose 16.3% in the after-hours session to $143.20.
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