Mad Money

Gaming Halo 3


The release of Halo 3 should be the biggest videogame event of the year, Cramer said, and that’s good news for GameStop.

The Gamestop Trade

The company’s stock shot up 20% during the month before Halo 2 came out, and Cramer is expecting even more media attention for the newest release. That might push GameStop’s gains even higher.

But don’t buy just yet, though. GameStop reports earnings Thursday morning, and there’s a chance the stock could sell off after the call, Cramer said. Because industry sales have been so good, expectations are high for GME – maybe too high. Not to mention, the delays on Grand Theft Auto 4 could mean less-than-impressive guidance for the third quarter.

A word of caution: If GME misses its 9 cents to 13 cents per share earnings estimates, Cramer said to abandon the trade. But if it pulls in 11 cents per share and the stock goes down, at least investors know the fundamentals are good and there’s an opportunity to buy.

“Only pull the trigger on a trade if you get the right entry-point,” Cramer said. “If GME goes down, buy some. If it doesn’t, pass.”

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