Korean entertainment giant sees depreciation in stock market
The share price of HYBE goes down as its boy group BTS announced the break earlier this week. They plan to pursue solo careers.
HYBE saw its stock price slip 10.96 percent on June 13, 3.02 percent on June 14, and 24.87 percent on June 15. Overall, its value depreciated some 35 percent this week alone.
The response of investors is understandable because the seven-member K-pop group explained around 70 percent of HYBE’s operating income last year, according to Meritz Securities.
During BTS Festa, an event celebrating the ninth anniversary of the septet, members shared the news of the hiatus in a live-streamed video of enjoying dinner.
Leader RM and member Jungkook said that they needed time to mature, promising to come back someday.
The news came on the heels of the release of the music act’s anthology album “Proof” along with the title track “Yet to Come (The Most Beautiful Moment).” (See the June 11 Korea News Plus article.)
The announcement appears to have something to do with the military duties of BTS members.
All able-bodied South Korean males have to enlist by age 28. The parliament revised the relevant law in 2020, allowing K-pop stars to delay the age to 30.
There have been debates on whether or not to grant top K-pop stars military exemptions. But the country failed to reach a conclusion on the thorny issue.
Against this backdrop, Jin has to enlist this year, which seems to prompt the BTS members to announce hiatus as a team and seek personal projects.
“In case BTS members stop team activities and world tours, the expected performance of HYBE should be revised,” KB Investment & Securities analyst Lee Sun-hwa said.
“The decreased operating income would weigh down on the share price of HYBE down the road.”
If all the seven members of BTS enlist early next year, Hana Financial Investment projected that the operating income of HYBE would more than halve from 439 billion won ($340 million) to some 200 billion won ($160 million).