Big Hit Entertainment, 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. The shares soared up to 160 per cent more than its IPO price, giving it a market value of around $10 billion, placing the company on course to join the all-time top 10 debuts on the South Korean stock market.
Big Hit shares opened at 270,000 won, valuing the company at about 9.6 trillion won ($8.38 billion), compared with an IPO price of 135,000 won per share last month. The stock rose as much as 30 per cent in early trade to 351,000 won, compared with a 0.3 per cent fall on the benchmark KOSPI. That puts the company on track to join the all-time top 10 debuts on the South Korean stock market, based on first-day closing prices.
Big Hit relies heavily on BTS, with the Billboard-topping group accounting for 87.7 per cent of the label’s revenue in the first half of 2020, according to a regulatory filing. The seven-member boy band has a huge global fan base, which the label has promoted effectively through social platforms and online performances since in-person performances were cancelled because of the coronavirus pandemic.
The hit IPO has now catapulted Big Hit founder and co-CEO, Bang Si-hyuk, as one of South Korea's richest people. He has become South Korea's fifth richest stockholder. The listing makes the BTS members multimillionaires, with each granted shares worth as much as 24 billion won ($20.94 million) according to early trade.
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.
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.
BTS earned a Guinness World Records title for most viewers for a livestreamed performance after its first paid online concert in June drew nearly 757,000 from 107 countries.
