Capital Calls: Crypto buy won't flatter beauty app

Meitu

08/03/2021 08:37

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
    HONG KONG, March 8 (Reuters Breakingviews) - Concise
insights on global finance in the Covid-19 era.
 
    -------------------------------------------------

SKIN DEEP. Chinese beauty app Meitu  1357.HK  is trying to apply
gloss to its business. The Hong Kong-listed company, best known
for its photo-editing app popular among selfie-takers, has
purchased $40 million worth of ether and bitcoin and is
assessing whether it can integrate blockchain into its overseas
businesses. It looks more desperate than opportunistic though,
spending a sum equal to nearly 3% of its market capitalisation
compared to the roughly 0.2% Tesla  TSLA.O  splurged last month
when the electric-car maker put $1.5 billion into
cryptocurrency. 
    Meitu stock slumped on Monday, and its shares are down
almost 70% since they started publicly trading in 2016.
Investors are right to be cynical. It’s eking more money out
from premium subscription services but online advertising
revenue is its mainstay and that declined 12% in the six months
ended June compared to a year earlier. Meanwhile, the company
has ricocheted between businesses, attempting everything from
making smartphones to selling skincare products offline. Meitu’s
latest facelift looks all wrong. (By Sharon Lam) 
    On Twitter http://twitter.com/breakingviews
    
    Earlier in Capital Calls:
    
    Shutterfly’s touch-up  urn:newsml:reuters.com:*:nL2N2L31CF
    Lloyds’ risky property punt  urn:newsml:reuters.com:*:nL2N2L30PG
    China falls back on GDP targets  urn:newsml:reuters.com:*:nL3N2L312U
    Michael’s recycled buyout  urn:newsml:reuters.com:*:nL3N2L24AR
    OPEC’s abundance of caution  urn:newsml:reuters.com:*:nL2N2L22UI
        
     
    - SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS http://bit.ly/BVsubscribe
  

 (Edited by Una Galani and Katrina Hamlin)