While MicroStrategy (NASDAQ:MSTR) is racing to buy as many Bitcoins as possible, an AI-focused from China is looking to cash in on the year-to-date rally in cryptocurrencies.
Meitu Inc (HK:1357), a technology company known for its AI-powered beauty-focused apps, disclosed the sale of its entire cryptocurrency portfolio, which consisted of 31,000 units of Ether and 940 units of Bitcoin, acquired in 2021.
The transaction resulted in a total cash consideration of approximately $180 million (around 1.3 billion RMB), yielding substantial gains of $79.63 million (approximately 571 million RMB).
The company's board has announced plans to allocate about 80% of the net proceeds from this sale to pay a special dividend. This equates to roughly 457 million RMB or HK$0.109 per share, translating to a 3.8% yield based on the current share price.
The remaining portion of the net proceeds is earmarked for business expansion. Meitu aims to channel these funds into the growth of subscription-based imaging and design products, signifying a strategic focus on its core business offerings.
Morgan Stanley (NYSE:MS) has commented on Meitu's recent move, interpreting it as a strong indication of the company's dedication to its operational focus and commitment to enhancing shareholder value.
"We think the sale of all these cryptocurrency holdings for shareholder return and business development proves Meitu's determination to create value for investors with its subscription-based product focus," analyst Lydia Lin wrote in a note.
"We believe this is a turning point for this company's position in capital markets and presence in investors' minds, marking significantly improved corporate governance."