Chinese photography app Meitu invests in crypto

By Samuel Indyk

Investing.com – The Chinese photo editing app Meitu Inc (HK:1357) announced late on Sunday it had bought $40mln worth of bitcoin and ether, marking another company willing to invest in cryptocurrencies. The purchase of ether will interest some as it appears the first major company to purchase a cryptocurrency other than bitcoin.

The company, which is listed on the Hong Kong Exchange, said it had bought $22.1mln worth of ether (or 15,000 units) and $17.9mln worth of bitcoin (379.1214267 units). The purchase follows the likes of Square (NYSE:SQ) and Tesla, who have recently announced purchases of bitcoin in a bid to diversify their reserves.

In a statement, the company said the purchases were made pursuant to a cryptocurrency investment plan previously approved by the board of directors, under which the company may make a net purchase of up to USD 100mln worth of cryptocurrencies financed by existing reserves other than any remaining proceeds from the company’s IPO.

“The Board believes cryptocurrencies have ample room for appreciation in value and by allocating part of its treasury in cryptocurrencies can also serve as a diversification to holding cash (which is subject to depreciation pressure due to aggressive increases in money supply by central banks globally) in treasury management,” Meitu said in a statement.

“More importantly, the Board considers this a demonstration to investors and stakeholders that the Group has the vision and determination to embrace technological evolution, and hence preparing its foray into the blockchain industry.”

Shares of Meitu opened higher by 14% in Hong Kong trading before a sharp sell-off throughout the day saw their shares close lower by 6.3%.