Since its inception on the exchange in October 2020, the share price of HYBE has steadily increased until peaking on November 18, 2021 at 419,000 KRW (approximately $295).
However, in June 2022, HYBE stock began to plunge after the announcement of global group BTS temporarily suspending activities to promote solo projects of 7 members. Along with the school violence scandal of Kim Garam, a former member of the girl group Lesserafim, a series of investors withdrew their capital. At that time, HYBE’s shares fell 25%, losing a market capitalization of 2 trillion KRW (about 1.44 billion USD).
As of the morning of October 12, HYBE shares are trading at 113,000 KRW (4.64% decrease from the previous day). As can be seen, the group’s shares have fallen 73% from their peak in November last year.
Experts say that most of the company’s profits come from the national boy band. Having BTS members enlist in the army for 18 months puts their investment at risk.
Besides, some think that HYBE has a lot of potential for development because it has bought a lot of small and medium entertainment companies. Without BTS, HYBE will suffer a great loss but will quickly recover thanks to the activities of new young artists such as NewJeans, TXT, Lesserafim, etc.
Kim Ha Jeong, a researcher at Daol Investment & Securities, said, “SEVENTEEN and TXT have been seeing rapid fandom growth through their sales since August. Considering that HYBE is also developing new games, the market’s assumption that there will be little growth next year is too conservative.” He also added, “BTS is expected to make a comeback after 2025. If growth is possible next year, operating profit of about 60 billion won in the current quarter is at a low performance level.”
Lee Hwa Jeong, a researcher at NH Investment & Securities, also emphasized, “The sluggish share price trend continues due to uncertainties related to BTS. Considering that BTS activities have not completely stopped and the high performance of other lineups such as SEVENTEEN, TXT, and New Jeans, the current share price decline is somewhat excessive.” As a result, some predict that positive growth will continue in the upcoming year, helping to bottom out the current performance.
HYBE’s stock price has been falling after peaking in November last year. In particular, it is analyzed that prolonged uncertainties over BTS‘ group activities and members’ enlistment-related issues are weighing on the share price. As a result, many people believe that the current stock value couldn't be back to their peak without BTS:
- My statement refers to the fact the boys account for still 70% of HYBE revenue. One word from them makes their stock plummet. So while they ain't the management, HYBE can't go against their wishes. That's what it means when I say, they run the company. It ain't rocket science.
- You're probably unaware that BTS members own $107 million in HYBE stock in addition to their annual income. They clearly have a say in their careers because they generate 60-70% of HYBE's revenue.
- Without BTS, HYBE can't be bigger anymore
- How other group can cover BTS's hole? No way, they can help a part but couldn't cover totally
- HYBE knows the main role of BTS
- BTS reputation attracts many investors for HYBE
- Just a statement can drop the a huge stock price in a night
- But the way HYBE treats BTS is so bad
- This is the importance of BTS!
