Meitu, a Chinese photo retouching app listed in Hong Kong, announced that it has purchased $ 40 million in bitcoin and ethereum.
The company said in a disclosure on the Hong Kong Stock Exchange on Sunday that it bought 15,000 units of ETH and 379.12 units of BTC in open market transactions at an average cost of $ 22.1 million and $ 17.9 million. , respectively, on Friday.
“These purchases were made in accordance with a cryptocurrency investment plan previously approved by the board of directors, under which the Group can make a net purchase of up to US $ 100 million in cryptocurrencies, financed by its existing cash reserves, except for any remaining revenues from the company’s initial public offering, “Meitu said in the announcement.
Founded in 2008, Meitu is one of the most popular mobile applications in China, with a market capitalization of HK $ 11.7 billion ($ 1.5 billion). As of June 2020, Meitu held 2.5 billion yuan ($ 384 million) in cash and net financial reserves and had 295 million declared active monthly users.
Its president and founder Cai Wensheng is also a well-known pro-bitcoin figure who said in 2018 in an interview that he personally accumulated 10,000 BTC at the time.
Sunday’s announcement, with a signature written by Cai, said that Meitu’s board believes that blockchain technology has the potential to disrupt existing technology and financial industries, similar to what the mobile internet did with the PC internet and many other offline businesses.
In this context, the company believes that “cryptocurrencies have ample room for appreciation and, by allocating part of their treasury in cryptocurrencies, it can also serve as a diversification to maintain cash (which is subject to depreciation pressure due to aggressive increases in supply of money by central banks around the world) in treasury management. “
Meitu is also one of the first publicly traded Chinese companies to join the ranks of Square, Tesla and MicroStrategy in possession of bitcoin as part of its treasury management strategy.
“[Bitcoin] has several characteristics that allow it to be a good alternative reserve of value, such as being limited in supply, its interchangeability in fiat currency or goods and services, portability and its potential to act as an effective hedge against the depreciation of fiat currencies due to the aggressive increase in money supply by central banks worldwide, “wrote Cai in the statement, adding:
“Some of these features potentially make Bitcoin a superior form to other alternative reserves of value, such as gold, precious stones and real estate. As an alternative reserve of value, its price is primarily a function of future demand that is driven by investor consensus. and the general public. “
With regard to its investment in ETH, Meitu described to its shareholders several application activities, including finance, games, social media and art and collectibles, which were built on top of the Ethereum protocol.
“The Group is currently evaluating the feasibility of integrating blockchain technologies with its various businesses abroad, including, but not limited to, launching Ethereum-based dApps, as well as identifying suitable blockchain-based projects abroad for potential investments,” he said. Meitu and therefore “buying Ether is therefore a logical preparation for both initiatives.”
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