Meitu has joined a host of other companies buying cryptocurrencies with their corporate funds
Meitu is a Chinese photo retouching software company listed in Hong Kong. It said that it had bought $40 million worth of bitcoins and ETH. According to the company, the 15,000 ETH were worth $22.1 million, while the 379.1 bitcoins were worth roughly $17.9 million.
The company said, “These purchases were made pursuant to a cryptocurrency investment plan previously approved by the board of directors”. Meitu intends to buy cryptocurrencies worth $100 million, which would be financed by the company’s existing cash reserves other than any remaining proceeds from its initial public offering.
Meitu said the investment helps to diversify its holdings away from cash. The board believes the move shows investors and stakeholders that the company has the vision and determination to embrace technological evolution. Hence, the reason why they are venturing into the crypto and blockchain space.
The company added that it is currently evaluating the feasibility of integrating blockchain technology into its businesses outside Hong Kong. This includes the development and launch of Ethereum-based decentralised apps. Meitu is also considering investing in several blockchain-based projects, most of which accept ETH as investment payment.
Meitu believes cryptocurrencies will increase in value over time and by allocating part of its treasury to the coins, they can diversify their holdings away from cash, which is subject to depreciation pressure.
The software company has been around since 2008 and is one of the most popular mobile apps in China, with over 295 million self-reported monthly active users. Meitu has a market cap of HK$11.7 billion ($1.5 billion). According to its June 2020 report, Meitu held 2.5 billion yuan ($384 million) in cash and liquid financial reserves.
Meitu’s chairman and founder, Cai Wensheng, has always been a pro-Bitcoin figure. In 2018, he revealed that he had personally amassed over 10,000 BTC as he capitalised on the price slump following the 2017 bull cycle.
Meitu is amongst the first Chinese publicly listed companies to join the ranks of Tesla, MicroStrategy and Square in holding BTC as part of its treasury management portfolio.