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SEOUL – Members of the popular South Korean K-Pop band Bts They are expected to become multi-million dollar shareholders after receiving shares from their label, Big Hit Entertainment, as they prepare an initial public offering (IPO) that could raise up to 962.6 billion won ($ 811 million).
This week, Bts marked the first no. 1 spot on the US Billboard Top Music Chart with the uplifting hit album “Dynamite.” Her first English-language single hit the spot for fans of American pop, with a YouTube video that has already garnered more than 284 million views.
Last month, Big Hit CEO and largest shareholder, Bang Si-hyuk, delivered 478,695 common shares to the seven Bts members, or 68,385 each, “to strengthen the long-term partnership with top artists and raise morale,” Big Hit said in a regulatory filing Wednesday.
Every Bts The member would get 9.23 billion won in shares, or 64.6 billion won in total, if the initial public offering trades at the top of its range in October.
The donation in shares can be interpreted as an attempt to link Bts members and the label more closely together, said Kim Hyun-yong, an analyst at eBEST Investment & Securities.
Big Hit plans to offer around 7.1 million shares at an indicative price of between 105,000 and 135,000 won per share.
The price potentially values the company at up to 4.8 trillion won ($ 4.04 billion), considering convertible preferred shares plus common shares, analysts said.
“The stock could perform well when listed as there is now a lot of liquidity in the market … So it depends on the Big Hit results, but the lack of physical concerts due to COVID-19 will likely have a negative impact,” said Nam Hyoji, an analyst at KTB Investment and Securities.
Big Hit relies heavily on Bts, with around 87.7% and 97.4% of its revenues in the first half of 2020 and 2019, respectively, coming from the group, according to the document.
With Bts Members are expected to enter mandatory military service for South Korean men in the coming years, the label has worked to address market concerns that it needs to diversify its sources of income.
“There is the military problem, but if there is no legal exemption, Big Hit is expected to establish units with the remaining members or perform solo acts while serving in the military,” said Kim Hyun-yong.
($ 1 = 1,188.7900 won) —Report by Joyce Lee and Heekyong Yang; Edited by Kim Coghill
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