On May 22, Inno Universe (03700.HK) announced that, due to the board's belief in the potential of cryptocurrencies and the importance of investing in them for the group's Web3.0 business development strategy and asset allocation strategy, the company plans to make potential cryptocurrency purchases during the authorization period (i.e., 12 months from the date when shareholders officially pass the ordinary resolution for the purchase authorization and potential cryptocurrency purchase at the annual general meeting), with a total amount not exceeding $100 million.
The cryptocurrencies to be purchased include Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and USD Coin (USDC). It is estimated that approximately $60 million will be used to purchase Bitcoin (BTC), about $20 million for Ethereum (ETH), and about $10 million each for Tether (USDT) and USD Coin (USDC).
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In the announcement, Inno Universe stated that the Web3.0 industry and blockchain technology hold the potential to disrupt the current financial and technology sectors, and the Web3.0 industry is still in an active development phase, with cryptocurrencies having long-term value appreciation potential. The company is confident in the prospects of the Web3.0 industry, and investment in cryptocurrencies is an important part of the company's Web3.0 business development strategy and asset allocation strategy.
It is worth mentioning that the cryptocurrency market has been turbulent recently, with Bitcoin once breaking through the $70,000 mark and Ethereum surging by 25% overnight, showing extremely strong performance.
In recent years, Inno Universe has repeatedly ventured into popular fields including the metaverse and short dramas, and its announcement of cryptocurrency trading has immediately attracted widespread attention from all sectors of society.
It is reported that Inno Universe was previously known as Inke Interactive Entertainment Group, claiming to be a leading interactive social platform in China, with its core product Inke Live launched in 2015.
In 2022, with the explosion of emerging concepts such as the metaverse and Web3.0, Inke officially changed its name to Inno Universe Group and fully entered the metaverse. Since then, Inno Universe has also entered new emerging popular fields such as AIGC and short dramas.
These layouts of Inno Universe have also achieved certain results. A recent research report by Anxin International pointed out that in the second half of 2022, due to competition and adjustment of development strategies, the revenue of Inno Universe's social business sector saw a significant decline, but it has gradually emerged from the trough in 2023; the short drama business is becoming a new business growth point, driving the company's profit to recover and grow in 2023; from a valuation perspective, the company's net cash level (excluding investment and financial management) is about 2.36 billion yuan, which is significantly higher than the company's current market value.
As innovative businesses such as short dramas are favored by the market, Inno Universe has chosen to announce a huge investment in purchasing cryptocurrencies after the cryptocurrency market has surged. This move has raised some investors' doubts, questioning whether Inno Universe has deviated from its main business and has the suspicion of speculative cryptocurrency trading.