Billion-watt sparkle for newly listed K-pop firm
Shares in the management agency of K-pop sensation BTS more than doubled on their stock market debut in Seoul yesterday, making an instant multibillionaire of its chairman and boosting the seven band members' own fortunes. The initial public offering of shares in Big Hit Entertainment saw staggering...
Friday, October 16, 2020
Shares in the management agency of K-pop sensation BTS more than doubled on their stock market debut in Seoul yesterday, making an instant multibillionaire of its chairman and boosting the seven band members' own fortunes.
The initial public offering of shares in Big Hit Entertainment saw staggering demand, with the public section oversubscribed more than 600 times and applicants receiving only a tiny fraction of their requests.
The firm's centerpiece asset BTS have risen to global stardom in recent years, cementing their place in the world music market in August with their English-language track Dynamite topping the US Billboard Hot 100.
The IPO price was set at 135,000 won (HK$912) but opened at double that on the Korea Exchange, and within minutes it hit its daily limit of 351,000 won.
It slipped back later but still had a market capitalization of 10 trillion won, putting it among South Korea's 40 most valuable companies.
Big Hit founder and chief executive Bang Si Hyuk, who is retaining a stake of more than 36 percent of the firm, was worth the equivalent of US$3.8 billion (HK$27.36 billion) at the peak, according to Bloomberg.
He thanked the fans "who have always loved and believed in Big Hit's artists and content."
The flotation also boosted the BTS members' wealth.
Bang gave each of them more than 68,000 shares in August, worth around US$20 million at yesterday's high and totaling 1.4 percent of the firm.
"Considering the information about the firm now available, the IPO price could be the lowest we'll ever see," said Park Sung Ho of Yuanta Securities.
Some investors cashed in straight away.
"I received two shares and just sold them," said a poster on South Korean portal Naver. "With 260,000 won in profit I will buy a winter coat."
Others going online thought the rise was unsustainable. "It will soon fall rapidly," said one.
There is one inescapable hurdle looming for the newly listed agency: mandatory military service for all seven boy band members, who made their debut in 2013. South Korea requires all able-bodied men to serve, usually for 18 months.
Under the rules, 27-year-old BTS member Kim Seok Jin - famous as Jin - must report for duty by the end of 2021. The other six will have to follow in the coming years.
South Korea is debating exemptions for stars such as BTS, who generate huge sums for the national economy.
But no dispensations have so far been granted to pop stars, and if the seven are forced to leave the stage it could blow a hole in Big Hit's finances.