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NEW YORK - Mega Matrix Inc. (NYSE American: MPU), a $35.5 million market cap holding company known for operating the short-video streaming platform FlexTV, announced today that its Board of Directors has approved the purchase of Bitcoin and Ethereum to be held as a treasury reserve asset. According to InvestingPro data, the company maintains a healthy liquidity position with a current ratio of 2.78, suggesting strong capability to manage new investments.
The decision by the company’s board reflects a strategic move to diversify its financial portfolio with cryptocurrencies, which CEO Yucheng Hu described as "next-generation treasury assets." Hu believes that incorporating Bitcoin and Ethereum into the company’s treasury reserves will enhance its financial strategy and strengthen its long-term balance sheet positioning. This move comes as the company’s stock has experienced significant volatility, with InvestingPro analysis showing a 57% decline over the past year, though current valuations suggest the stock may be undervalued.
Mega Matrix, headquartered in Singapore, operates through its indirect wholly owned subsidiary Yuder Pte, Ltd. The company focuses on producing and streaming short dramas and has gained attention in the entertainment industry for its innovative approach to content delivery.
The move to invest in digital assets comes amidst a broader trend of companies exploring cryptocurrencies as a potential store of value. However, the volatility of Bitcoin and Ethereum poses inherent risks, which the company acknowledges. These risks, along with other factors such as fluctuating economic conditions and regulatory changes, could impact the company’s future performance and results. The company’s financial health metrics from InvestingPro show an EBITDA of -$7.58 million in the last twelve months, highlighting the importance of prudent treasury management.
This announcement is based on a press release statement from Mega Matrix Inc. and includes forward-looking statements subject to risks and uncertainties. These statements are not guarantees of future performance, and actual outcomes could differ materially from those projected in the press release. The company has not disclosed the amount of Bitcoin or Ethereum it plans to purchase or the timeframe for the acquisition.
Investors and market watchers may follow Mega Matrix’s updates on its social media channels and via its website, where the company commits to disclosing material information in compliance with its obligations under Regulation FD.
The adoption of cryptocurrencies by Mega Matrix Inc. marks a significant step for the company as it aligns itself with the evolving digital asset landscape while continuing to prioritize its core business in the streaming entertainment sector.
In other recent news, Mega Matrix Inc. has announced a strategic partnership with Interactive Films LLC, a subsidiary of Snail, Inc., to co-develop and distribute short dramas globally. This collaboration aims to combine the strengths of both companies in the entertainment sector, with Mega Matrix managing production and Snail Games contributing its expertise in immersive storytelling and AI technology. Additionally, Mega Matrix and 9Yards Cinema Production have established a $100 million investment fund to produce short dramas for television and film, based in the Abu Dhabi Global Market. This joint venture is expected to leverage both companies’ expertise to support acquisitions and capitalize on global investment opportunities in the short drama sector. The CEOs of Mega Matrix and 9Yards Cinema highlighted this initiative as a pivotal step in their global pan-entertainment strategies. These developments signify Mega Matrix’s efforts to expand its presence in emerging markets, particularly in the Middle East and North Africa region. The partnerships align with industry trends of media companies seeking collaborations to enhance their production capabilities.
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