Big Hit Entertainment sheds more than 22 percent
K-pop sensation BTS’s management agency Big Hit Entertainment saw its stock price plummet more than 22 percent on the second day after its listing on the Seoul bourse.
Big Hit finished 200,500 won ($175) on Oct. 16, down 22.29 percent from a day before. The music label went public on Thursday with great fanfare on the back of BTS’s global popularity.
With the opening bell, its shares surged to the maximum daily ceiling of 351,100 won. But they started to go south to close at 258,000 won on Day 1.
In other words, the agency’s market capitalization decreased by more than 40 percent in just two days.
Initially, the share prices were expected to soar thanks to BTS, the seven-member vocal group that debuted in 2013 to become one of the world’s biggest boy bands.
The septet became the first South Korean act to top Billboard’s Hot 100 singles chart with its song “Dynamite” in late August.
Big Hit’s sales amounted to $504 million last year, and its operating profit stood at $85 million. More than 90 percent of them were attributable to BTS.
But concerns rose over the past week after BTS leader RM’s speech on the Korean War (1950-53) during the James A. Van Fleet Award ceremony in New York early this month.
In an online message, RM said, “We will always remember the history of pain that our two nations share together and sacrifices of countless men and women.”
The two nations refer to South Korea and the United States, which fought against North Korea and China in the three-year war _ the North’s failed attempt to annex the South.
The comments angered some Chinese internet users, who claimed BTS disregarded Chinese soldiers who died during the warfare.
The controversies reportedly made South Korean corporations to erase BTS photos used in their online advertising campaigns in China. In this climate, experts worried its negative effect on Big Hit’s market value.
“I think that the China issue weighed on Big Hit. In addition, the overall market was not good during the past two days,” SK Securities analyst Lee So-joong said.