Chinese Meitu Follows Tesla (TSLA) and Buys $40 Million of Bitcoin and Ethereum, Shares Close Over 6% Lower After Rallying 15%

Meitu, a China-based company behind a photo-editing app under the same name, said it bought $22.1 million worth of Ethereum (ETH) and $17.9 million worth of Bitcoin (BTC) last week.

This way, the Chinese company has followed the footsteps of Tesla (NASDAQ: TSLA), Square (NYSE: SQ), and Microstrategy (NASDAQ: MSTR) and invested a part of cash reserves into cryptocurrency.

“Blockchain technology has the potential to disrupt both existing financial and technology industries, similar to the manner in which mobile internet has disrupted the PC internet and many other offline industries,” the company said in a statement.

“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.”

Although the company noted cryptocurrency prices are “still highly volatile,” it said it is continuing to evaluate different options to further adopt cryptocurrencies. For instance, the company is “ “evaluating the feasibility of integrating blockchain technologies to its various overseas businesses” including potentially launching ethereum-based apps or investing into other blockchain businesses.”

Meitu stock, which trades in Hong Kong under the ticker “1357,” initially soared about 15% before crashing to close at the session low of 6.27%.

On Friday, MSTR announced it spent $10 million in cash to buy 205 bitcoins at an average price of $48,888 for each bitcoin, including fees.

You May Also Be Interested In

• Tesla (TSLA) to Accelerate Launch of More Affordable Models
• Tesla (TSLA) PT Lowered to $180 at Mizuho
• Luminar Technologies (LAZR) Began Delivering LIDARs for Volvo EX90