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GameStop announces partnership with crypto exchange FTX

Yahoo Finance Live anchors discuss second-quarter earnings for GameStop as well as the company’s new partnership with crypto exchange FTX.

Video Transcript

BRIAN SOZZI: GameStop CEO Matt Furlong only needed about 8 minutes on his earnings call last night to discuss the state of the retailer turned crypto play. That's right, folks. GameStop may now be a crypto play as the company unveiled a new deal with trading platform FTX.

So Julie, the way I'm thinking about this, you have Matt Furlong, CEO of GameStop. You have Ryan Cohen, executive chairman. And I just imagine them two sitting in a room with Sam Bankman-Fried. Let's throw-- what can we throw out to get our trading community excited? What would excite them? Let's put out a press release with really no details, and let's put your name in the press release, FTX. Let's put GameStop up, our name, in this press release and disclose virtually nothing.

Now, FTX gift cards will be in GameStop stores. Who cares? Who cares? What does a gift-- FTX gift card actually made to this company's bottom line? GameStop lost more money. They continue to lose money. And if you're on that 8 minute and 59 second earnings call last night, you still got the sense there's a couple more quarters coming of GameStop losing even more money.

JULIE HYMAN: I am really curious because the financial terms of this weren't disclosed. Like, who paid who in this situation, right? Obviously, FTX's Sam Bankman-Fried has been putting money into a lot of struggling crypto firms. We don't know if there was any kind of investment in GameStop as a part of this. It had to-- if there was, it had to have been below a certain threshold or would have had to have been disclosed. But to your point, there's just so much we don't know here.

I love the commentary out from the analysts over at Vital Knowledge here in reaction to this. They said the bulk of Jimmy's business remains in an extreme secular decline. And investors shouldn't fall for the company's-- you'll love this-- quote, "endless series of gimmicky announcements."

BRIAN SOZZI: There we go. It's almost like I know what I'm doing. But look at this press release. They said GameStop in partnership with FTX, the partnership is intended to introduce more GameStop customers to FTX's community. What in the world does that even mean? Unclear.

What we do know is GameStop is a fumbling retailer losing large sums of money. And that continues to be the case with an unproven future. We still don't know the strategic vision of this company. And I'm surprised. You know, Sam Bankman-Fried has been on our network a lot. I'm surprised he would attach his name to anything involving Ryan Cohen right now, given all the controversy surrounding that guy.

JULIE HYMAN: I'm going to take a step back and say a couple of positive things here. First of all, the toys and collectibles business is the bright spot within GameStop. This is a business that they have been building up. And sales there were up 26%--

BRIAN SOZZI: That's Funko.

JULIE HYMAN: --about $223 million. So that's the business that's been doing better. And the other side of it is, even though NFTs, broadly, have really been in decline, there still is a use case for gaming in particular. You still have a lot of in-game purchases that are made using these types of tokens. There's still a whole Metaverse ecosystem around this kind of stuff, right? So it does make sense on that level, but to the point that you've been making consistently, the problem is the lack of detail that we are getting in these types of announcements.

BRIAN SOZZI: Wait, let me pull up on the GameStop earnings release, the line item that says business segment NFT marketplace. Oops, can't. It doesn't have it. There is none. And that's a big problem. If they're going to come out and hype these releases, there should be some disclosures on these earnings release. How big is that NFT marketplace business now? And then moving forward, how big a business is FTX gift cards at GameStop going to be? Unclear, unclear. But I appreciate your positive, Julie. I appreciate it.

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