All seven members of Kpop supergroup BTS have renewed their contracts with management company HYBE. This is good news in the context of the current situation where many major music groups are facing the risk of not continuing to renew their contracts with their management companies.
Although this is good news, on the contrary, HYBE's shares could not grow and even continued to decline in recent closing sessions. The reason for the decline in stock value is also determined by experts based on many factors.
Here's what industry experts have to say about HYBE's situation:
Since their debut in 2013, BTS have been credited with generating billions of dollars for their country, as well as enhancing the image and soft power of South ̾k̾o̾r̾e̾a over the world. However, since the announcement of "temporary hiatus" of group activities last year, this has created a worry for investors as the future of BTS's reunion remains unclear.
But these days, BTS has brought great confidence to fans, even hope for the future of Kpop when announcing to continue group activities with 7 members after demobilization. This is the result of all members agreeing to re-sign the contract with the management company BTS. This is also the second time BTS has re-signed with the old management company ahead of time, previously in 2018. It is expected that the new contract will be valid for about 5 years from 2025.
It is known that this is good news for many fields, not just the Kpop industry because BTS has a wide influence. HYBE itself is aware that the issue of BTS' continued contract renewal "is a management issue that could affect the company's financial condition and investor decision-making. Therefore, it has been officially announced" with the aim of stabilizing the market and investors' psychology in a volatile industry context.
However, on Wednesday, the day the news was announced, HYBE's stock price still closed down 0.82%. The index also continued to fall 1.07% on Thursday showing that even making a statement about BTS's future cannot save the stock market scene.
Even in the latest trading session, ̾k̾o̾r̾e̾a Exchange said HYBE closed at 230,500 won on KOSPI, down 5.14% compared to the previous trading day. This situation has defied the speculation of many industry experts that HYBE re-signing the contract with BTS will cause stock prices to increase in the near future.
At the time HYBE announced the news, Kim Hye-young, a researcher at Daol Investment & Securities, said: "As Seventeen's m̷i̷l̷i̷t̷a̷r̷y̷ service period begins in 2024, BTS's activities after the second half of 2025 are a factor that will help increase stability. With this contract extension of BTS, concerns about HYBE's future have subsided slightly, so the stock price is expected to increase in the short term. "
However, when witnessing the inability of HYBE stock price to revive, many experts pointed out that its decline was due to the general weakening of investor sentiment in the stock market. South ̾k̾o̾r̾e̾a's KOSPI fell 1.75%, leading declines in Asia, and ended at 2,514.97, its lowest in nearly a month. KOSDAG closed down 2.5% to 860.68, also at its lowest since July 10.
Not only that, the rumors surrounding the possibility of YG Entertainment's super girl group BlackPink disbanding also impact the Kpop entertainment industry in general. Data from the ̾k̾o̾r̾e̾a Exchange on the 21st reveals that YG Entertainment's stock price fell to 69,200 KRW (51.59 USD) per share - a hefty decline of 13.28% from the prior day when the stock price was 79,800 KRW (59.50 USD) per share. This has wiped around 100 million USD in YG's market cap in one single day, and this is the lowest the stock has been trading in nearly five months when stock prices were hovering around 66,700 KRW (49.73 USD) per share back in early May 2023.
In this context, BTS helped minimize the damage to HYBE. Not only that, the news of BTS's reunion in 2025 has also partly eased investors' worries, saving the market situation!
