Key takeaways from Massive Hit’s massive inventory debut – Leisure

Choi Ji-won (The Korea Herald/Asia Information Community)

Seoul, South Korea   ●  
Wed, October 21, 2020


At 8:50 a.m. on Thursday, Chairman Bang Si-hyuk of Massive Hit Leisure, residence to Ok-pop phenom BTS, rang the bells marking the corporate’s preliminary public providing on the Korea Alternate headquarters in Seoul. An enormous step ahead for the 15-year-old firm, and in addition some of the anticipated IPOs of the yr, the itemizing ceremony was livestreamed — a primary within the bourse operator’s historical past.

“We started as a small leisure firm that got down to deliver therapeutic via our music and artists. Right now we’ve grown into a worldwide firm with over 1,000 staff, 4 music labels and 7 subsidiaries,” Bang stated. “As a listed agency, Massive Hit feels a renewed sense of duty to our shareholders and our society.”

Based in 2005 by former JYP Leisure producer Bang, Massive Hit has gone via its ups and downs to now stand tall because the nation’s largest leisure company.

The corporate began to see enterprise develop in 2015 when BTS, after its debut in 2013, topped music charts in and overseas with hits comparable to “Run” and “Mic Drop”. The band made a breakthrough the next yr when it made its debut on the Billboard Scorching 100 chart with the one “DNA” and nabbed its first High Social Artist prize on the Billboard Music Awards. Within the following years, they made their manner into the highest 10 of the High 100 chart 4 occasions, lastly topping the listing with “Dynamite” this yr.

Together with BTS, the corporate has seen its income develop quick, outpacing greater rivals. Final yr, the agency posted 98.7 billion gained ($86.54 million) in working income, which in comparison with a mixed 85.9 billion gained earned by the nation’s three greatest Ok-pop businesses SM Leisure, JYP Leisure and YG leisure.

Learn additionally: Every part it’s worthwhile to learn about Massive Hit IPO

Listed here are key takeaways from Massive Hit’s massive inventory debut.

Q. Is IPO good or dangerous?

An preliminary public providing is the method of sharing the possession of a non-public firm with the general public. It’s a large step ahead for a corporation as it’s a means to ask the general public to assist its future and lift funds for additional enterprise growth.

On the similar time, a listed agency holds a heavier duty, as its enterprise choices and the outcomes are immediately linked to shareholders’ advantages. The agency additionally faces stricter authorities surveillance when it comes to clear administration and truthful commerce.

Q. What’s Kospi?

Brief for Korea Composite Inventory Value Index, Kospi refers back to the nation’s primary bourse the place main company shares are traded. The nation’s sole bourse operator KRX additionally operates the secondary bourse Kosdaq, a tech-heavy market primarily for smaller firms.

Kospi requires a shareholder fairness of 30 billion gained or extra, whereas Kosdaq requires a shareholder fairness of three billion or over. With its whole belongings valued at 363 billion gained – amongst which shareholder fairness accounts for 173.5 billion gained – Massive Hit made its inventory debut on the Kospi, whereas the opposite massive three businesses — S.M., JYP and YG — are listed on the Kosdaq.

Q. How massive was the inventory debut?

On the primary day of buying and selling, the inventory went via a roller-coaster trip.

The inventory debuted at 270,000 gained – twice its providing value of 135,000 gained. It spiked 30 % – the day by day permissible restrict – to 351,000 gained at one level. Then the inventory closed at 258,000 gained, down 4.4 % from the opening value.

Massive Hit was undoubtedly some of the heated IPOs of the yr, with round 1.94 trillion gained in shares traded on the primary day, topping the day by day transaction quantity on each the Kospi and Kosdaq.

Q. Is Bang Si-hyuk richer now?

Bang is the biggest shareholder with a 34.74 % stake. Based mostly on Monday’s closing value of 189,000 gained, his inventory wealth is valued at 2.34 trillion gained – making him the twelfth richest inventory billionaire within the nation.

Inside the leisure trade alone, Bang is the tops the inventory wealthy listing, outpacing JYP’s Park Jin-young and YG’s Yang Hyun-suk.

Q. What about BTS?

Forward of the itemizing, Bang had granted a complete of 478,695 shares cut up equally among the many band’s seven members. Receiving 68,385 shares every, the septet’s inventory wealth is valued at 12.92 billion gained per individual, primarily based on Monday’s value. Whereas Bang topped the trade’s inventory wealthy listing, the BTS members are additionally believed to be ranked among the many high 10.

Q. What about Massive Hit staff?

About 1.42 million treasury shares had been allotted to Massive Hit staff. Contemplating there are 313 staff at Massive Hit primarily based on its July submitting, the inventory wealth per individual is estimated at about 560 million gained on common. Now greater than 1,000 staff work on the firm. The treasury shares can’t be offered through the lockup interval of 1 yr after itemizing.

Q. The place is the value at now?

Regardless of its massive debut, the inventory suffered a downfall within the following days. On Tuesday, the inventory closed at 182,500 gained, greater than 30 % down from Thursday’s beginning value.

Many institutional buyers and overseas nationals are promoting closely as they search short-term income. Analysts say extra falls appear inevitable when the lockup interval ends within the coming months.

Q. What’s the value outlook?

The typical goal value amongst main securities corporations is 258,857 gained per share. Their outlooks vary from 160,000 gained to 380,000 gained.

Q. What are the longer term dangers?

Massive Hit’s heavy dependence on BTS, whose valuation can’t be precisely equated into numbers, is taken into account a key threat for the corporate’s enterprise growth. Within the current three years, the one group made up virtually 90 % of the corporate’s whole income.

The enlistment deadline can be approaching for the seven bandmates. A legislation revision is into account to permit pop artists to delay their obligatory army service for as much as two years.

Q. What are the alternatives?

There’s no signal of BTS slowing down. The group’s newest single “Dynamite” was an enormous success, topping the Billboard Scorching 100 chart for the primary time as a South Korean act. Regardless of their canceled world tour, the newest two-day digital live shows have attracted virtually 1 million viewers around the globe and ticket gross sales are estimated at about 50 billion gained.

Expectations are already excessive for the group’s upcoming album BE (Deluxe Version), which is ready to be launched Nov. 20. Rookie group TXT can be gearing up for a return subsequent week with a brand new album.

The agency not too long ago accomplished the acquisition of smaller rival Pledis Leisure, residence to Seventeen and Nu’est.

This text appeared on The Korea Herald newspaper web site, which is a member of Asia Information Community and a media associate of The Jakarta Submit

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