The falling price of cryptocurrencies is expected to cause a net loss of up to 349.9 million yuan (US$52 million) for the first half of 2022, according to Meitu, a Hong Kong-listed beauty app.
Meitu predicted that its net loss for the first half of 2022 might increase by 154% year over year.
One of the first Hong Kong-listed Chinese firms to openly reveal its cryptocurrency investments was Meitu, widely known for its mobile beauty camera software.
How Meitu lost millions
Meitu claims that their estimations represent unrealized losses because it has not sold any of its cryptocurrency holdings since acquiring 31,000 ETH and 940.89 BTC in March 2021.
Meitu stated that it still expects that digital assets will rise in value over the long run and that crypto losses won’t have an impact on its cash flow or business operations.
Meitu’s shares on the Hong Kong Stock Exchange dropped as low as HK$0.97 on Monday morning, Asia time, a 6 percent decrease from last Friday’s closing price of HK$1.04 (US$0.13) per share.
In March 2021, Meitu began investing in bitcoin and ether, claiming that they had space to rise in value or perhaps eclipse gold and precious stones as a store of wealth.
Over the previous 12 months, the stock’s value in Hong Kong trading has decreased by 89%, wiping off HK$3.1 billion of capitalization.
Meitu, the owner of the Chinese selfie app, forewarned investors that because of its entry into cryptocurrencies, which had a catastrophe over the previous two months on worries about recession, its losses might increase by as much as 154% in the first half of this year.
listed in Hong Kong For the six months ending June 30, 2022, Meitu, whose applications let users edit their selfies, expects to lose between 274.9 million (US$41.1 million) and 349.9 million yuan.
Meitu, a Chinese company that creates a photo-editing tool, is the most recent corporation to buy cryptocurrencies after buying bitcoin and ether.
The Hong Kong-listed business said on Sunday that it acquired $17.9 million in bitcoin and $22.1 million in the ether on March 5.
Meitu buys bitcoin in the same manner as companies like the electric vehicle manufacturer Tesla and Square. However, it appears that the Chinese software developer is the first significant business to purchase ether, a cryptocurrency that runs on the Ethereum network.
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Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2022/07/04/meitus-bitcoin-faced-a-loss-of-us-50-million/