The Psychology of GameStop's Management Communication - Will investors listen?

GameStop's (GME) management is making every effort to recoup investor trust after earnings missses earlier in the year. We now have not one but two clear signals of management communicating confidence in their business. They are practically yelling . . .

"Trust us, GameStop is well positioned, we are gaining share. We will come through with record earnings. The drivers for our business are solid, don't lump us with the overall industry."

Will investors listen?

Let's take a look at recent events . . .

• This morning, GameStop management broke silence, and commented outside their normal window that GameStop's new video games sales for the all important November period were up a stunning 15%, this in light of a 3% decline in industry coms in the same period according to NPD. 
• Just tree short weeks ago, after reporting earnings on the top end of guidance for the 3rd quarter, management raised the bottom of estimates from $2.40 to $2.45 while keeping the top end at $2.64 (representing EPS growth between 2% and 10%).

What does this mean to investors?
Managements announcements, first raising the floor on earnings and then today's announcements must be contrasted with their earnings misses  in both Q2 and Q3 of this year. These misses coupled with fears from digital distribution and increased competition have clearly hurt GameStop's price, taking it to a near record low valuation. Given the credibility loss management has suffered it is a powerful statement  to give not one but two bullish signals to the market in a three week period.

"Trust us, GameStop is well positioned, we are gaining share. We will come through with record earnings. The drivers for our business are solid, don't lump us with the overall industry."

Will investors trust them this time around?

My take is that management cannot afford to miss again, specially in light of their recent communications. Personally, I am giving them the benefit of the doubt.