Meitu, which operates image and video products, has recently been making an investment that is not related to its main business.
On the evening of April 8, Meitu announced on the Hong Kong Stock Exchange that on that day, the company’s wholly-owned subsidiary Meitu Hong Kong purchased 175.67798279 units of Bitcoin in open market transactions according to the cryptocurrency investment plan, with a total consideration of approximately 1. Ten million dollars. As of the date of this announcement, the Group has cumulatively purchased cryptocurrencies worth approximately US$100 million. Affected by this news, on the morning of the 9th, Meitu pulled up in a straight line, once rising by more than 8%. As of the day’s close, it fell back to 3.85% and reported 2.7 Hong Kong dollars per share.
In response, the reporter contacted Meitu, and the latter responded that the relevant content of cryptocurrency is subject to the announcement information.
In fact, this is Meitu’s third purchase of Bitcoin. About a month ago, on March 7, Meitu Group disclosed for the first time that the company had purchased 15,000 units of Ether and 379.12 units of Bitcoin at a total consideration of US$22.1 million and US$17.9 million, respectively.
10 days later, Meitu issued a document again saying that its wholly-owned subsidiary Miracle Vision purchased a further 16,000 units of Ether, with a total consideration of approximately US$28.4 million; 386.08 units of Bitcoin, with a total consideration of approximately US$21.6 million. In RMB, the total purchase price this time is about 304 million yuan.
According to the announcement on March 7, these purchases were made in accordance with a cryptocurrency investment plan previously approved by the board of directors. Meitu can purchase cryptocurrencies with a net value of no more than 100 million U.S. dollars. The source of funds is the company’s existing cash reserves (but Excluding the remaining money from the company’s initial public offering).
If the bitcoins purchased this time are added, Meitu has purchased a total of 31,000 units of ether and 940.87798279 units of bitcoin so far, at a total cost of 100 million U.S. dollars. This means that the 100 million U.S. dollar cryptocurrency investment quota promised by the board of directors has all been used up.
Since January this year, the prices of cryptocurrencies represented by Bitcoin and Ethereum have been volatile and rising. Among them, Bitcoin reached $30,000 on January 2 and broke through the 40,000 mark in less than a week. It reached $50,000 on February 16 and broke the $60,000 mark on March 13. Currently, the price of Bitcoin remains at around $58,000. Ether has oscillated from the closing price of $730.37 on January 1, 2021 to $2084.8 on April 9.
Obviously, Meitu has seen strong growth momentum in cryptocurrencies. In the three announcements, the company stated that cryptocurrencies have enough room for appreciation. Investing in Bitcoin is one of the asset allocation strategies. Some of these features may even make Bitcoin better than other alternative ways of storing value (such as gold). , Gems and real estate). And investing in Ether is just a preparation for entering the blockchain industry.
With the impact of the epidemic and the uncertainty of traditional asset appreciation, the outstanding performance of cryptocurrencies represented by Bitcoin and Ethereum has undoubtedly become the focus of the investment market. However, the industry has different views on the Meitu investment currency circle.
Shen Meng, executive director of Chanson Capital, analyzed to the reporter of “Science Innovation Board Daily” that at present, Meitu’s main business is experiencing bottlenecks and it is difficult to find a breakthrough because of the recent increase in the price of cryptocurrency. However, with the continuous evolution of blockchain technology, there are indeed some new functions that can be used for digital entertainment. If Meitu wants to enter the blockchain field, it needs to research and develop related technologies instead of buying and selling virtual currency.
With the high-profile purchases of Bitcoin by companies such as Tesla, the market’s sentiment on cryptocurrencies has risen, but at the same time, it can be seen that the price has been in a state of large fluctuations, and market risks cannot be ignored.
Shen Meng believes that although many people think that cryptocurrency is a choice to replace the current legal currency, it does not actually have the ability to act as a value exchange intermediary. It can only be regarded as an investment product, so its fluctuations are also determined by investment or Speculative sentiment is dominant, don’t be fooled by the so-called cryptocurrency.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.