stockmarket

K-Pop band BTS scores huge hit on South Korea stock market in management firm's IPO


The management company behind the popular South Korean boy band BTS has scored a huge hit on the country’s stock market after its shares doubled on their first day of trading.

Investors scrambled to buy into the success story of Big Hit Entertainment amid speculation that the South Korean government could allow K-pop and other celebrities to defer their military service, citing their huge contribution to the country’s economy and international reputation.

Big Hit Entertainment’s shares started life on the Seoul market at 270,000 won ($US253), compared with an initial public offering price of 135,000 won last month.

The stock climbed as much as 30% to 351,000 won, compared with an overall 0.3% fall on the benchmark Kospi index.

The company is now valued at almost 10 trillion won ($US8.5bn), placing the company on course to join the all-time top 10 debuts on the South Korean stock market.

Earlier this week reports emerged that South Korea’s military recruitment agency was considering allowing pop and other celebrities to defer their national service.

While Wednesday’s initial public offering will boost their management firm’s value, the band members’ personal wealth will also skyrocket after they were each given more than 68,000 shares in August.

Their global popularity and the billions of dollars they generate for the South Korean economy has prompted a discussion on whether it is fair to force stars to complete military service just as they reach the height of their performing powers.

South Korea requires all able-bodied men aged between 18 and 28 to serve in the military for almost two years to defend the country against security threats from the nuclear-armed North.

Under the existing conscription laws, BTS’s 27-year old singer Jin – whose real is name Kim Seok-jin – will have to report for duty by the end of 2021.

The other six members, born between 1993 and 1997, will have to follow in the coming years.

The country’s defence minister, Suh Wook, has said that exemption is not under consideration, but that BTS members and other popular pop culture figures might be allowed to defer.

While the law grants military service exemptions or deferrals to successful international athletes and classical musicians for their contribution to South Korea’s image overseas, but the measure has never been applied to pop singers and celebrities, according to the Yonhap news agency.

South Korean retail investors earlier this month laid out 58.4 trillion won in orders for Big Hit shares, falling just short of a record 58.55 trillion won for the retail portion of Kakao Games’ listing in September.

Big Hit relies heavily on BTS, with the global chart-topping group which accounted for 87.7% of the label’s revenue in the first half of 2020, according to a regulatory filing.

The seven-member boy band has a huge fan base around the world, which the label has promoted effectively through social media platforms and online performances since in-person performances were cancelled because of the coronavirus pandemic.

Analysts say the company has proved itself extremely online savvy, using Youtube and social media for market infiltration. It also has an unprecedented level of control over its revenue streams via its Weverse fandom platform, which has the potential to draw in other artists, analysts say.



READ SOURCE

Leave a Reply