This stock has really had its share of ups and downs, most of which have to do with the perception that the video game sector is declining, especially absent online offerings.

Before getting into my reasons for confidence in the company, if you look at the chart, the stock has tended to bottom out around $18 or $19 and then swing up to around 25.  So right now with it being on an upswing, the chances would seem good that it will gravitate toward the 25 level.

To complement my buying of the $21 calls expiring September 18 (as of this writing, 1.25) , a rise to 24 will make a very nice profit.

So the company itself.  I will admit that things are going towards electronic delivery of games, which tends to favor a company like Amazon as opposed to Gamestop.  But a couple of points here, 1 is the company knows this and they are working on  ways to stay on top of the game.  CEO Paul Raines (wasn't he a character in 24?) has this to say:

"We are also migrating our Web site from a purely e-commerce site to a gaming platform that users can visit to play, learn and purchase games. We are testing a loyalty program, Power Up Rewards, which should go national by fall. The program will provide members with discounts and credits, as well as some other perks like trips to game publishers, passes to Comic Con, and first-access to becoming a beta tester for new games."

This quote actually presents both of my arguments, 1 is the transformation of their website to a premier gaming destination on the web.  The other is the experience of gaming, the culture.  The most rabid gamers, the ones who drive the majority of the sales, are of the younger variety and the type to go to the midnight Madden release party, or who buy so many games they need the  buy, sell, trade method.  Raines speaks about this unique model:

"In tough economic times the consumer doesn't want to spend $59 for a new game. That's why our value proposition of buy, sell, trade gives consumers the most access. They may not have $59, but they may have $40 and an old game under their bed that they can trade in for a new title."

So a loyalty program giving trips to Comic Con and the like might really have an impact for this crowd.   

The other reason I like this company at this particular price is that the trends in retail are toward a recovering economy.  So that helps to explain how this year's Q1 was their best ever.   I can't say how good earnings will be for Q2, but with easy year-over-year comparisons, I'm willing to bet they look good.

The full interview here http://www.thestreet.com/story/10808883/1/gamestop-ceo-qa-can-paul-raines-s...