November 23, 2024

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[THE INVESTOR] Shares of Big Hit Entertainment, which is yet to go public, are skyrocketing on the snowballing fame and fortunes of its seven-member boy band BTS. In fact, market sources say that the stocks are in short supply and no one want’s to let go of them now.

“Even if you are keen to invest in the stocks, it’s impossible now,” said one analyst, declining to be identified. “The last notable trading took place when a couple of venture capital firms sold their stake to Netmarble Games in March.”

For instance, Korea Investment & Securities, which holds a 2.36 percent stake in Big Hit, has said it has no intention of selling any time in the near future. 

BTS at the 2018 Billboard Music Awards.

Industry sources say that early this year, a well-known US-based private equity fund was unsuccessful in securing a stake.

Adding to its attraction, BTS won the Top Social Artist Award for the second straight year at this year’s Billboard Music Awards held in Las Vegas on May 20 (local time).

On top of that, preorders for its latest album “Love Yourself: Tear” released on May 18 shot past 1.44 million to become the group’s second million-seller.

According to local investment banks, Big Hit Entertainment has a market value of more than 1 trillion won (US$928.60 million). It’s the highest among local entertainment agencies and also more than the 800 billion won Big Hit was estimated to be worth in March when Netmarble scooped up a stake.

“If Big Hit goes through with an IPO this year, it’s likely to be worth around 1.2 trillion won,” said Lee Ki-hoon, an analyst with Hana Financial investment.

SM Entertainment, currently the largest agency in Korea, was worth 400 billion won as of May 21. Its stock price ended at 39,300 on May 23. In 2017, the agency’s operating profit reached 10.9 billion won, while Big Hit posted 32.5 billion won.

By Bryan Hong (bhong@heraldcorp.com)