Why GameStop might jump on board the bitcoin bandwagon

By James RogersRetailer's shares jump in premarket trading after report of possible bitcoin investmentShares of GameStop Corp. gained more than 7% in premarket trading following a report that the company is weighing a bitcoin investment.Citing sources familiar with the matter, CNBC reported that the videogame retailer and original meme stock (GME) is considering investing in alternative asset classes, including bitcoin (BTCUSD) and other cryptocurrencies.GameStop shares initially climbed more than 16% after hours Thursday before paring their gains. The stock is up 7.5% in premarket trading. The company did not immediately respond to a MarketWatch request for comment on the report.Related: GameStop's stock rises after CEO Ryan Cohen's social-media post sparks bitcoin chatterThe company's stock surged earlier this week after Chief Executive Ryan Cohen posted a picture of himself on social media with Michael Saylor, the executive chair of software company and popular bitcoin play MicroStrategy Inc. (MSTR).The post sparked speculation on social media that GameStop is planning a bitcoin investment.Crypto-industry companies are seeing a bright future ahead under the more friendly Trump administration. Crypto-trading platform Coinbase Global Inc. (COIN) reported blockbuster earnings Thursday afternoon, saying it's "the dawn of a new era for crypto" and forecasting healthy growth this year. On Wednesday, rival trading platform Robinhood Markets Inc. (HOOD) also reported a huge quarter fueled by crypto trading and optimism for the coming year.Related: MicroStrategy raises another $600 million from preferred stock sales to buy bitcoinMicroStrategy, which is now doing business under the name Strategy, recently completed $20 billion of a $42 billion capital plan to buy bitcoin that was announced last year.In December 2023, GameStop's board of directors approved a new investment policy that permits the company to invest in equity securities, among other things. The board gave Cohen the authority to manage the investment portfolio.GameStop shares and those of AMC Entertainment Holdings Inc. (AMC) skyrocketed in 2021 during the meme-stock frenzy fueled by investor Keith Gill, also known as Roaring Kitty. In Gill's first YouTube livestream in three years in June 2024, the trader described himself as a "believer" in GameStop and subsequently grew his stake in the company.Related: Roaring Kitty makes cryptic 'Futurama' post. Everyone is trying to figure it out.GameStop reported a surprise profit in its third-quarter results in December. The company had $4.616 billion of cash, cash equivalents and marketable securities at the end of the quarter, up from $929.2 million at the end of the prior year's period.However, analyst firm Wedbush thinks that a return to profitability in GameStop's core business is unlikely.As of Thursday's close, GameStop shares were up 81.5% over the last 12 months.-James RogersThis content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.