BTS have risen to global stardom in recent years Photo: AFP

BTS management agency stock doubles on market debut

By Kang Jin-kyu

Shares in the management agency of K-pop sensation BTS more than doubled on their stock market debut Thursday, making an instant multi-billionaire 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 607 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 world's biggest music market in August with their all-English track "Dynamite" topping the U.S. Billboard Hot 100.

The IPO price was set at 135,000 won ($118) but but within minutes of the Kospi exchange opening the stock was trading at 330,000 won, platforms showed.

At that level Big Hit has a market capitalization of 11 trillion won -- $9.6 billion -- putting it among South Korea's top 30 most valuable companies, and ahead of cosmetics-maker Amore Pacific.

Big Hit founder and CEO Bang Si-hyuk -- who is retaining a stake of more than 36 percent of the firm -- was already worth $1.4 billion at the IPO price, according to the Bloomberg Billionaires Index, and will have seen his net worth soar.

The flotation also boosts the band members' own wealth -- Bang gave each of them more than 68,000 shares in August, worth around $8 million at the IPO price and totalling 1.4 percent of the company.

Analysts had expected the 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.

But there is one inescapable hurdle looming for the newly listing 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.

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.

But no such dispensations have so far been granted to pop stars, and if they are forced to leave the stage it could blow a hole in Big Hit's finances: BTS were responsible for 97 percent of its revenues last year, according to the IPO prospectus.

Big Hit acknowledged their anticipated absence as a "risk factor".

It is looking to expand activities such as "contents licensing sales" that do not require the artists' "direct participation" to try to cushion the blow.

But it acknowledged their time off-camera "could have a negative impact on the company's profitability and growth".

© 2020 AFP

©2020 GPlusMedia Inc.

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4 ( +5 / -1 )

Japanese are hella jealous of these guys' international success.

0 ( +5 / -5 )

The image of men in the modern era. I wonder what the people 50 years ago would think how we turn out. Probably not this.

5 ( +7 / -2 )

When I think of K pop I think of suicides. Will they never learn. Money will not buy them happiness. It will mess them up. I can see it coming.

-2 ( +4 / -6 )

SK stringent adherence to national service is the deal breaker.

Politically, to debate exemptions for stars such as BTS , is akin to creating a lawyers charter, the legal train that will follow will be accounted in years.

2 ( +2 / -0 )

It's great being a commodity to be bought and sold on the stock market.

5 ( +5 / -0 )

This is GIGO. Reminds one of a Ponzi scheme.

4 ( +4 / -0 )

How about JT give use guys a bit of inside information about how we could of invested in them before?

-1 ( +1 / -2 )

Subtle, Speed, may I suggest ironic, commodities have a developed definable value chain. the essence enshrined in the recognizable network of labor and production processes.

BTS, cannot in any manner of context be construed as unit/analysis/raw material.

BTS risk is capricious, variable, and based/defined with *financial uncertainty, legal liabilities, strategic management errors. Being singing and dance "pretty boys" *has a shelf life.

Remember One Direction?

2 ( +3 / -1 )

60% is from Japanese fans and Japanese media.

Until late 90's, it was reverse, Koreans were fans of Japanese groups/bands/musician.

Not anymore and Never will.

0 ( +3 / -3 )

BackpackingNepalToday 01:47 pm JST

60% is from Japanese fans and Japanese media.

Until late 90's, it was reverse, Koreans were fans of Japanese groups/bands/musician.

Not anymore and Never will.

Because Japanese forgot the No.1 rule: The future belongs to those who show up for it

0 ( +2 / -2 )

Leo: "When I think of K pop I think of suicides. Will they never learn."

He says, while Japan is still reeling from the news of Yuko Takeuchi, Sei Ahina, Haruma Miura, and Hana Kimura -- all of whom committed suicide within four months of each other.

Ego Sum Lux Mundi: "Japanese are hella jealous of these guys' international success."

You got that right. And point out to the people not only that most Japanese prefer Korean products in one form or another (be it cheaper TVs or phones, Korean dramas, music, or what have you), and how young people aspire to go to Korea to learn to sing and dance and be in a band, and the EXPLODE! So much so they air a show about Hiromi Go -- ironically so full of botox and plastic surgery he can't close his lips or frown -- was the peak of Johnny's to try and focus on the accomplishments of that entertainment industry.

-1 ( +3 / -4 )

The music industry is an insidious business. That’s why musicians prosper outside of it.

0 ( +0 / -0 )

What goes up comes down. Personally I think it is a terrible investment. What happen when these guys get old. The only person who made the money was the founder, those who bought stock low and if it is high sell it now and take the gains!

3 ( +3 / -0 )

Even though the governments of South Korea and Japan are at odds i hope the people remain friendly to each other!

0 ( +0 / -0 )

I think kpop and hallyu still have a few years left LOL

-1 ( +1 / -2 )

Very risky investment if these people are investing for the long term. Because unlike the other agencies such as SM, YG and JYP that have debuted numerous successful groups over the years. Big Hit has BTS, and well only really BTS.... A recent boy group that they debuted, is doing okay, but nothing amazing. So, unless they can hit it lucky with a few more groups of BTS' level. The bubble will eventually burst, and along with it, those high stock levels......

1 ( +2 / -1 )

Very risky investment if these people are investing for the long term.

Who would invest in this for the long term?

Do people commenting on this thread not understand how investing works?

-1 ( +1 / -2 )

t's great being a commodity to be bought and sold on the stock market.

Well, now they are very rich. If anyone wants to list me on the stock market let me know.

0 ( +0 / -0 )

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