Big Hit IPO draws more than $50 billion from individual investors
Big Hit Entertainment, the agency behind K-pop superstar BTS, drew more than $50 billion in a retail subscription, four South Korea brokerage houses in charge of the bid said this week.
Through the two-day subscription, retail investors submitted $50.2 billion in the Big Hit public initial offering (IPO), which almost broke a month-old record.
The previous record was set by Kakao Games, the game publisher that attracted $50.3 billion this September as more and more people enjoy games at home due to the virus pandemic.
As individual investors ordered around 600 times more than allocated shares, which amount to some 4.2 million, those who deposited $100,000 will be able to get merely three shares.
Big Hit’s annual sales are still less than $500 million, and almost all of its turnover comes from BTS. Despite the relatively small size and undesirable revenue portfolio, investors rushed to buy Big Hit shares because of the idol group’s popularity.
The seven-piece K-pop group is the world’s largest boy bands. In late August, it became the first Korean artist to top the Billboard Hot 100 chart with hits song “Dynamite.”
This prompts analysts to come up with positive outlooks for the Seoul-based agency whose value is set to surpass the combined values of the previous Big 3 K-pop labels _ JYP, YG, and SM Entertainment _ on its Oct. 15 IPO.
“Big hit has its own platform, intellectual property, and global fan base,” Yuanta Securities researcher Park Sung-ho said. “In the sense, Big Hit is different from other outfits in the K-pop industry.”