One of the biggest stories in K-Pop right now is the situation occurring between SM Entertainment and HYBE. On February 10, HYBE announced it had purchased Lee Soo Man’s shares, making it the largest shareholder in the company.

While on February 20 (KST), SM Entertainment’s CFO, Cheol Hyuk Jang, released a video revealing his take on the situation. 

In the video, Cheol Hyuk Jang shared his views on the “Hostile Takeover” from HYBE after the company acquired 14.8% of the shares of SM Entertainment after buying them from Lee Soo Man.

He mentioned that: "As soon as SM’s new vision “SM 3.0” was announced, the largest shareholder sold his stake, and a hostile takeover attempt by a competitor started.

This is an attempt that ignores not only the fierce deliberation and efforts of the 600 SM employees who have dreamed of becoming the No.1 entertainment company in the world, but also the values and pride of SM that it has pursued together with the fans and artists.

Today, we would like to tell you in detail about SM Entertainment’s position on the current situation. On February 9, HYBE became SM’s largest shareholder by acquiring 14.8% of SM’s stake held by executive producer Lee Soo Man, the company’s former largest shareholder. HYBE has also announced that it would ultimately acquire ~40% stake through a tender offer currently underway. This is clearly a “hostile takeover attempt” that has not been consulted with the current management and board.

Through this attempt for hostile takeover, HYBE seems to plan to exercise the management control by dominating the board of directors.

We know better than anyone else that under such a governance structure, it is difficult to make decisions that prioritize the value of all SM shareholders, including the remaining 60%.

This is the same as returning to the wrong past of ‘SM for a certain shareholder’, which we have been trying so hard to break free from."

Yet, amidst the new video coming out, some netizens were ̾s̾h̾o̾c̾ked to see the phrase “BIGHIT” trending.

On social media, netizens couldn’t hide their relief that amongst the drama, HYBE K-Pop groups like BTS and TXT were seemingly safe from everything that was going on:

- im just enjoying and having fun with the sm/hybe drama, because bts and txt are safe thanks to pd making bighit private

- just sitting back and enjoying tea fr

- This man is a business genius from the start. He knows what he’s doing. Other companies should learn from him.

- really the smartest thing he has ever done is making bighit music private before he stepped down we love yew bang sihyuk!

- btxt is safe so i just sit back and watch the drama in peace

- That's why we r enjoying having popcorn on hands

- laughing at all of this knowing bts and txt are safe no matter what bc bighit ent is private

- bighit is private so me and bts are good the rest of y'all have fun though

In particular, they praised Bang Si Hyuk for making BIGHIT MUSIC independently run back in 2021 before the Ithaca merger.

Yet, as BIGHIT started trending, many netizens shared confusion about how the company is a separate entity and how it impacts the current situation with SM Entertainment.

HYBE is a corporation and acts as an umbrella company for many different subsidiary labels, including BIGHIT, BE:LIFT, ADOR, Pledis, and Source Music. All of the artists under the different labels work within HYBE but are operated by their own subsidiaries.

In regard to BIGHIT, the only three artists under the company are BTS, TXT, and soloist Lee Hyun.

Yet, although the significance of BIGHIT MUSIC might not seem important, many ARMYs and fans have shared their relief as the label is an independent entity.

BIGHIT MUSIC is a subsidiary with 100% of the shares held by HYBE. Therefore, it is not possible for anyone to directly purchase shares of BIGHIT MUSIC on the stock market or from other investors. Only HYBE has the ability to transfer its BIGHIT MUSIC shares or make the decision to issue new BIGHIT MUSIC shares to others.

With HYBE being a public company, its shares are traded and therefore, it is possible for others to potentially purchase a large stake in HYBE and then exercise influence over the operations of BIGHIT MUSIC, with BIGHIT MUSIC being a subsidiary of HYBE. However, at this time, there’s no concern about this happening.

In particular, it is important when it comes to the decision-making for the groups under the subsidiary labels. Unless HYBE decides to significantly change the current structure, the subsidiary labels will continue to operate the way they have been.

By looking at the structure of both companies, netizens also don’t have to worry as Bang Si Hyuk still owns a large part of HYBE, with 31.8% of the shares.

SM’s structure is very different as the majority of the company is held by minority shareholders, and it’s much easier for another investor to obtain the single largest stake in the company, which is what HYBE did by acquiring 14.8% of SM’s shares.

With the situation between SM Entertainment and HYBE still hot news and very uncertain, many netizens have shared their relief at Bang Si Hyuk’s previous decisions that ensure all the artists are safe and not impacted by what is going on.