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SEOUL: Kim Eun-hee wants to complete her collection of Korean boy band BTS memorabilia by bidding more than $ 120,000 to buy shares of the group’s music label Big Hit Entertainment in South Korea’s most popular initial public offering, which even it could shake up the money markets.
Fervor is building among diehard BTS fans from South Korea to secure at least a portion of the K-pop band’s label, as the order books for next month’s list opened this week.
“I’m adding my support for BTS by buying shares; it will be added to my collection here,” said the 51-year-old woman at the BTS-themed cafe she runs in Seoul, which is filled with BTS merchandise, from a 47- photo of a inch wide from gang member Jin to toys designed by the group.
Big Hit Entertainment is betting that going public will be a huge success thanks to the success of the seven-member band, which has become the first South Korean group to reach No. 1 on the US Billboard Hot 100 singles chart with the catchy song “Dynamite”. .
There is already insatiable demand for new share prices from South Korean retail investors, known as “Ants,” because the government’s stimulus efforts to boost the economy after the coronavirus crisis have flooded markets with cash.
Analysts predict that Big Hit will take the crown as South Korea’s hottest initial public offering, one the central bank is watching closely as a massive oversubscription of shares could create ripples in money markets in the short term.
READ: K-pop band BTS will become billionaire shareholders with the IPO of the label
“Gross offerings from retail investors could reach 100 trillion won ($ 85.23 billion), it’s the biggest fish of the year,” said Hwang Hyun-jun, analyst at DB Financial Investment. “The liquidity party is still going on, and the timing couldn’t be better as BTS just topped the card.”
ARMY OF ANTS
Big Hit is looking to raise up to 962.6 billion won ($ 825.9 million) in the IPO that is forecast to be South Korea’s largest in three years.
The offering of around 7.1 million new shares is currently set at between 105,000 and 135,000 won per share. The final price can be announced early next week or on Friday (September 25) afternoon.
But the stock valuation is less of an issue for Kim and other BTS fans, who call themselves ARMY.
Kim and four other fans bidding for shares said they would be lucky to get just one share, even if they bid for tens of thousands of dollars due to expected strong retail demand.
South Korean ants have been piling up in one IPO after another this year.
Cafe owner Kim Eun-hee, a fan of the K-pop boy band BTS, cleans desks with disinfectant at her cafe in Seoul, South Korea. (Photo: Reuters / Heo Ran)
Kakao Games’ September listing attracted 58 trillion won in offerings from retail investors alone on orders of about 1,500 times the number of shares offered, setting a record.
Following the flood of orders from Kakao Games’ IPO, the overnight buyback rate fell to a three-month low of 0.38% on September 3, as brokerages placed hundreds of billions of won in Pre-order deposits from retail bidders, Korea Securities Depositary Fair data.
A Bank of Korea official said the central bank is “monitoring the money market in the short term as funds are expected to enter the IPO market.”
The Big Hit list is also expected to turn the seven members of BTS into billionaires, as CEO Bang Si-hyuk in August gave them 68,385 shares each.
“I DON’T KNOW MUCH ABOUT VALUATION”
Some BTS fans plan to buy Big Hit stock for themselves on band members’ birthdays or other anniversaries.
“I can see myself buying one on V’s birthday,” Alice Park said, referring to one of the band members. Park, a 28-year-old banker, is taking out a “couple hundred grand” personal loan to make an offer.
Fans who load up on music label stocks aren’t new to the K-pop scene.
Local media reported that in 2008, a fan of Girls Generation, an all-female group, bought shares of their SM Entertainment label for 22.5 million won and saw them rise more than 2,700 percent in three years.
Kim Seo-hyeon, a 12-year-old BTS fan in Seoul, asked her parents to buy her a share so she could meet the band members at a future shareholders meeting.
“I don’t know about stock valuations. I know my oppas (BTS band members) are rich, but I hope that buying stocks makes them even richer, so they can buy something nice to wear, that makes me happy.” .
