Chinese Fashion operator Mogu Inc – ADR (NYSE: MOGU) skyrocketed during the session on Thursday after revealing a digital currency treasury strategy.
Shares flew during pre-market hours and ended the day about 75 per cent higher than last close. The company traded over 68 million shares and only has an average of about 16,700. The stock’s intraday peak exceeded 175 per cent.
Its Board of Directors have agreed to invest US$20 million in Bitcoin, Ethereum, Solana and other less prominent cryptocurrencies.
“The board believes that by integrating digital assets into its core assets, the company can diversify not only its treasury holdings but also its operational capabilities essential for next-generation AI products and services,” Mogu explained.
Mogu is an e-commerce platform specializing in clothing trends and lifestyle content. It generates revenue through the sale of fashion apparel, personal care items and beauty products while providing merchant services. Mogu’s primary focus is women between 15 to 30, targeted with key brands like Mogujie and Meilishuo.
Its decision to implement a cryptocurrency strategy is part of a broader trend among tech companies that seek to diversify their asset holdings, hedge against inflation and embrace emerging technologies. Microstrategy Inc (NASDAQ: MSTR) and Tesla Inc (NASDAQ: TSLA) (ETR: TL0) are a couple others to make similar gambles.
Mogu was founded by former Alibaba Group Holding Ltd – ADR (NYSE: BABA) (LON: 0HCI) engineer Chen Qi before making its public debut on the New York Stock Exchange in 2018. The style and beauty specialist raised US$66.5 million with its IPO.
Mogu has been able to carve itself out a unique niche in China’s highly competitive e-commerce market.
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