BTSAGENCY’S SHARESROCKETONSTOCKMARKETDEBUT
SEOUL— Shares in the management agency of K-pop sensation BTS rocketed on their stock market debut Thursday, making an instant billionaire of its chair and boosting the seven band members’ own fortunes.
The initial public offering (IPO) 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 prominence in the United States, the world’s biggest music market, in August with their all-english track “Dynamite” topping the Billboard Hot 100.
The IPO price was set at 135,000 won ($118) but opened at double that on the Kospi exchange and within minutes spiked to its daily limit of $306, platforms showed.
It later fell back to close at $225 but Big Hit still had a market capitalization of $7.6 billion putting it among South Korea’s top 40 most valuable companies, just behind cosmetics-maker Amore Pacific and Hana Financial Group.
Cashing in
Big Hit founder and CEO Bang Si-hyuk—who retains a 36 percent stake in the firm—was worth $3.8 billion at the peak, according to Bloomberg News. At a listing ceremony, he thanked “all the fans who have always loved and believed in Big Hit’s artists and content” and “our remarkable artists of whom we’re so proud.”
The flotation also boosted the BTS members’ own wealth— Bang gave each of them more than 68,000 shares in August, worth around $20 million at the day’s high and totaling 1.4 percent of the company.
Analysts had expected shares to power upwards.
“Considering all the information about the firm now available, the IPO price could be the lowest price we will ever see,” Park Sung-ho of Yuanta Securities told AFP.
Some investors cashed in straight away. “I received two shares and just sold them. With $227 in profit, I will just buy a winter coat,” said one poster on the South’s biggest internet portal Naver.
Others warned it would continue to decline after the initial euphoria, with one comment reading: “The entertainment industry is such a fast-changing the sector and a management agency entirely dependent on only one group is not that attractive businesswise.”
Reporting for duty
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 in uniform to defend it against security threats from the nuclear-armed North, usually for 18 months.
Under the existing conscription laws, BTS member Jin—real name Kim Seok-jin—aged 27, will have to report for duty by the end of 2021.
The other six members, born between 1993 and 1997, will have to follow in the coming years.
South Korea is currently debating exemptions for stars such as BTS, who have been at the forefront of the Korean Wave cultural phenomenon in recent years and are estimated to generate billions for the country’s economy.