Want to be the "Asian Tesla"? Meitu invests 40 million to buy Bitcoin and Ethereum, stock price soars at opening but then drops immediately

The Meitu Group, known for its popular photo editing app, announced on the 5th that it has invested $40 million to purchase Bitcoin and Ethereum as part of the company's cash reserve assets. In addition to becoming the first Asian listed company to hold Ethereum, Meitu's stock price surged by 13% at the opening of trading on Monday, only to fall back from its peak.

Announces Plan to Enter Blockchain Industry

According to previous reports, Meitu announced that:

On March 5, the Group purchased 15,000 units of Ether and 379.1 units of Bitcoin in the open market, with a total value of approximately $22.1 million and $17.9 million respectively.

Meitu stated that the reasons for acquiring these two assets are different: Bitcoin is for asset allocation, while Ether is for entering the blockchain industry, as it is purchased for deploying contracts, fuel fees, and other needs:

Meitu is assessing the feasibility of integrating blockchain technology into various international businesses, including but not limited to Ethereum dApps, searching for blockchain project investment targets, etc. Buying Ether aligns with the above plans - if Meitu launches dApps, Ether can serve as a fuel reserve, and Ether can be directly used as investment funds for blockchain projects.

This purchase is based on the "Cryptocurrency Investment Plan" approved by the company's board of directors, allowing Meitu Group to purchase cryptocurrencies not exceeding $100 million, all funded by the company's existing cash reserves.

Ether Holdings Exceed Bitcoin

Currently, Meitu holds approximately 379.1 Bitcoins, ranking 12th among all listed companies according to BitcoinTreasuries data.

Want to be the Asian Tesla?

Meitu has become the first Asian listed company to follow Square, Tesla, MicroStrategy, and others in buying Bitcoin, but the market response has unexpectedly reversed.

Stock code 1357 Meitu surged over 12% at the opening on Monday but quickly retreated to the starting point. By the time of writing, it had even dropped to 2.54 HKD, back to the level in early February.

Evidently, the positive news released by Meitu did not resonate with the market, which may be related to the opacity of the investment operations behind it. Several media outlets reported that Meitu's founder, Cai Wensheng, had invested in OKEx, Matcha, and even the controversial trading and mining platform FCoin. In addition, in 2018, the BeautyChain token BEC of the zeroing project "MeiChain" surged over 4,000% upon listing on OKEx, but subsequent smart contract coin minting vulnerabilities caused the coin price to return to zero. MeiChain repeatedly mentioned Meitu in its white paper at that time, and investors equated the two companies, despite Meitu's attempts to clarify the situation, it was too late.