Meitu, which operates image and video products, has recently made investments that are 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 wholly owned subsidiary of the Hong Kong Meitu company purchased 175,67798279 units of Bitcoin in open market transactions according to the cryptocurrency investment plan, for a total consideration of around 1.Ten million dollars. As of the date of this announcement, the Group has cumulatively purchased approximately US $ 100 million worth of cryptocurrency. Affected by this news, on the morning of the 9th, Meitu stopped in a straight line, once increasing by more than 8%. At the close of the day, it fell back to 3.85%.
In fact, this is Meitu's third Bitcoin purchase. About a month ago, on March 7, Meitu Group revealed for the first time that the company had purchased 15,000 units of Ether and 379.12 units of Bitcoin for a total consideration of US $ 22.1 million and US $ 17.9 million, respectively.
10 days later, Meitu issued another document saying that its wholly owned subsidiary Miracle Vision purchased another 16,000 units of Ether, for a total consideration of approximately US $ 28.4 million; 386.08 Bitcoin units, with a total consideration of around US $ 21.6 million.
According to the announcement on March 7, this purchase was made according to a cryptocurrency investment plan previously approved by the board of directors. Meitu can buy cryptocurrency with a net value of not more than 100 million US dollars. The source of funds is the company's existing cash reserves (but does not include the remaining money from the company's initial public offering).
If the bitcoins bought this time are added up, Meitu has bought a total of 31,000 ether units and so far 940,87798279 units of bitcoins, for a total cost of US $ 100 million. This means that the 100 million US dollars in cryptocurrency investment quota promised by the board of directors have all been used up.
Since January this year, the cryptocurrency prices represented by Bitcoin and Ethereum have fluctuated and gone up. Among them, Bitcoin hit $ 30,000 on January 2 and broke the 40,000 mark in less than a week. Bitcoin hit $ 50,000 on February 16 and broke the $ 60,000 mark on March 13. Currently, Bitcoin price remains around $ 58,000. Ether has oscillated from a 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 its three announcements, the company stated that cryptocurrencies have ample room for appreciation. Investing in Bitcoin is one asset allocation strategy. Some of these functions can even make Bitcoin better than other alternatives for storing value (like gold), gems and real estate). And investing in Ether is just preparation for entering the blockchain industry.
With the impact of the epidemic and the uncertainty of appreciation of traditional assets, the extraordinary performance of cryptocurrencies represented by Bitcoin and Ethereum has undoubtedly been the focus of the investment market. However, the industry has a different view on the Meitu investment currency circle.
With the purchase of high-profile Bitcoin by companies such as Tesla, market sentiment towards cryptocurrency has increased, but at the same time, it can be seen that the price is in a state of great fluctuation, and market risks cannot be ignored. .
I believe that although many people think that cryptocurrency is the choice to replace the current legal currency, it actually does not have the ability to broker the exchange of value, it can only be considered an investment product, so its fluctuation is also determined by the investment or dominant speculative sentiment, don't be fooled by the so-called cryptocurrency.