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September 20, 2020

BTS impact spills over into Korean stock market

PUBLISHED : September 03, 2020 - 16:17

UPDATED : September 03, 2020 - 16:17

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With Big Hit Entertainment, the label behind K-pop sensation BTS pursuing a public initial offering next month, investors appear to be increasingly drawn to South Korea‘s entertainment stocks.

Some market analysts also painted a rosy picture of the scheduled IPO, forecasting that Big Hit will continue the momentum created in the market thanks to offerings of pharmaceutical firm SK Biopharmaceuticals and game publisher Kakao Games.

The news of Big Hit filing an application for its market debut, came a day after BTS topped Billboard‘s main singles chart on Sept.2, Seoul time.

Stocks related to the K-pop darling have been also soaring on the expectations of the entertainment agency’s planned IPO.

Boy band BTS’ latest single “Dynamite” tops Billboard’s main singles chart on Aug. 31. (Yonhap)



Mobile gaming firm Netmarble, which owns 25.04 percent of Big Hit, saw its stock surge 14.74 percent to 198,500 won ($167) in intraday trading on Thursday. Big Hit’s stock remained at some 100,000 won based on closing price until July 1, but it skyrocketed since then to reach near the 200,000 won level.

The stock of production studio Chorokbaem Media, which is expected to make a TV show featuring BTS members, has also risen rapidly in recent months. Its stock price, which has been on an upward trend since mid-August, rose 15.12 percent Thursday morning to reach 1,865 won. DPC, whose subsidiary STIC Investment holds 12 percent stake in Big Hit, and entertainment agency Keyeast have also gained some limelight. Keyeast’s Japanese subsidiary SMC has been working for BTS as the boy band’s agency in Japan since 2017.

The members of the septet are also expected to become large stakeholders as they have received 478,685 shares in total -- 68,385 shares to each of the seven members.

“The company decided to give common shares to the artists in a bid to strengthen a long-term partnership and boost their morale,” Big Hit said.

According to a regulatory filing, the company will offer a total of 7.13 million shares at a price between 105,000 won and 135,000 won. When the price is set at 135,000 won, each BTS member’s shares will be worth more than 24 billion won.

It will carry out the book building procedure to gauge demand on Sept. 14-25 for global investors and Sept. 24-25 for the domestic market. NH Investment & Securities, Korea Investment & Securities, and JP Morgan will serve as lead underwriters with Mirae Asset Daewoo and Kiwoom Securities participating in the IPO as members of the underwriter group.

By Kim Young-won (wone0102@heraldcorp.com)

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