In recent days, the scandal involving a series of celebrities as actor Lee Sun Kyu and BIG BANG G-Dragon have covered the K-pop industry. Even BTS members were affected after rumors about the group's members being involved in this scandal spread on SNS.
Of course, any move by BTS will affect HYBE's stock value. As many people easily predicted, HYBE's stock value plummeted even though the rumors were unfounded and the company itself denied the rumors a few hours later.
Below is an overview of the general stock value of entertainment companies amid the escalating scandal and especially the decline in the stock of HYBE - the company leading among them:
BIGHIT Music has responded to a report alleging that BTS are regulars at the high-end hostess club that Lee Sun Kyun and G-Dragon are said to frequent.
On October 26, according to a report by Sports Chosun, another media outlet reported that the BTS members were also regulars of the high-end hostess club frequented by Lee Sun Kyun and G-Dragon. The h0stess club reportedly charges customers up to ₩10.0 million KRW (about $7,400 USD) for drinks and exclusively serves rich and high-profile customers. This is also the facility that is said to supply dr*gs to both famous celebrities.
This news is reported without grounds and evidence, but there are still many people spreading it more widely on SNS. This greatly affects the reputation of BTS members because they are the world's leading Kpop superstars and are always known for their completely standard image.
Just a few hours later, Bł₲ Ⱨł₮ Music had to issue a statement to confirm that the spreading rumors related to the BTS members were false. Along with that, they also affirmed that the members have nothing to do with the ongoing drug scandal.
Bł₲ Ⱨł₮ Music declared to the media: "BTS has nothing to do with the rumors, and the allegations are absolutely false. We will take strong lєgαl action against those spreading the rumors."
Meanwhile, it wasn't until the pσlícє announced that no other idols or celebrities were involved in Lee Sun Kyun's drug scandal that all further speculation ended. But all of the above moves cannot save the stock value of entertainment companies because of the seriousness of the incident.
Even HYBE, which was not involved in the above incident but was only infected, saw a 10.7% decrease in its stock value on the same day. They are even the company that witnessed the sharpest decline compared to other entertainment companies, including YG Entertainment (G-Dragon's management company), specifically: JYP Entertainment (-6.17%), SM Entertainment (-5.14%), and YG Entertainment (-7.89%).
Overall, entertainment stocks are rebounding in the early trading on October 27. Investment sentiment appeared to have recovered as celebrities continued to deny drug scandals that broke out the day before.
Due to this, HYBE went up 4.66% from the previous trading day. Along with this, JYP Entertainment (3.79%), YG Entertainment (2.99%), and CUBE Entertainment (2.33%) are also rising. SM Entertainment’s stock price is falling as some executives are being investigated for suspicions of market manipulation. While entertainment stocks are generally showing a rebound, interest is growing in the future stock price trend of HYBE, which fell nearly 11% the previous day. It is interpreted that sock prices have rebounded as celebrities who have been involved in drug scandals have denied them one after another.
The stock price is recovering again thanks to the agency’s statement, but investment sentiment is expected to remain frozen for the time being as there are so many large groups in HYBE, and the drug scandal is still threatening the industry. Overall, the above scandal has created a significant impact and great change not only in the Kpop entertainment industry but also in many other fields!
