If BTS returns HYBE, and NewJeans leave, what will happen to the stock price and investors?

 June 17th, 2024

BTS Jin was discharged from the military on the 12th. J-Hope will be discharged in October and Suga, RM, V, Jimin and Jungkook will be discharged in June next year.

Fans ARMY, HYBE, and HYBE shareholders will be waiting for their full comeback. The stock price, which rose to 400,500 won in 2021, has fallen since Jin joined the military in 2022 and is now in the 200,000 won range. After the conflict between HYBE and ADOR CEO Min Heejin was revealed on April 22th, the stock price fell from 21,500 won to 186,800 on April 22th, but as if welcoming Jin's discharge, HYBE's stock price has also risen since the 12th and closed at 20,500 won on the 14th.

For HYBE Chairman Bang Sihyuk, it is the return of his dependable eldest son. On his Instagram, which has been inactive since April, Jin is also active, as if quenching his thirst for inactivity due to military service. At the festival 2024 BTS FESTA held to commemorate BTS's debut date on the 13th, a hug event with 1,000 fans. Jin said, "I suggested to look good (to the fans)." As if his sincerity was evidently he ranked first in boy group brand reputation in June. It's a good news for HYBE after a long time.

From the 15th to 16th, "Weverse Con Festival" hosted by HYBE, was held at Inspire Resort in Incheon. Fromis_9, Le Sserafim, and ILLIT to HYBE families such as Seventeen, TXT, Boynextdoor, and Tours, all participated, but there is no appearance of NewJeans. HYBE said, "NewJeans is active overseas," but from the perspective of a third party, it feels like there are no employees left out the company's unity competition. 

What would happen to HYBE's stock price of BTS made a full comeback and NewJeans left? What are the investors' thoughts on CEO Min Heejin of ADOR? If 'Baemin, Nexon, and HYBE' dated April 29th was a cultural one, we'd like to analyze it from an economic one now. The seventh story of this lucrative hip hop is HYBE'. 

HYBE's major affiliates (based on: end of previous fiscal year, excluding overseas corporate earnings)

Translation of the photo above

If BTS comes back, will you get 340,000 won back?

According to the HYBE disclosure status, the highest operating profit as of the end of the previous business year was Big Hit Music with BTS and TXT, followed by Pledis with Seventeen, TWS, and fromis_9. With BTS serving in the military, TXT and Seventeen have toured around the world. Idol groups make money largely through performances, music, and album sales. Currently, the groups that can go on world yours in HYBE are BTS, Seventeen, and TXT.

BTS has performed at Wembley Stadium in the UK, but has yet to make a proper world stadium tour. This is because the moment when the song "Dynamite" topped the Billboard for the first time was during the COVID-19. After COVID-19 ended, they had to start serving in the military. If BTS makes a full comeback, the most awaited moment will be the worldwide stadium tour. Blackpink's world tour "Born Pink," which began in October 2022, will earn more than $264.5 million in revenue (U.S. all K-Pop estimate).

In the industry, the global K-Pop market is divided into bulletproof vs. non-bulletproof. This means that BTS has a large proportion. HYBE also thought the beginning of this year when BTS was not active was the biggest Crisist. In this context, HYBE Chairman Bang Sihyuk declared in March that he would receive only 1 won in annual salary this year. So BTS's comeback as a whole is a big boon for HYBE. Park Sooyoung, a researcher at Hanhwa Investment & Securities set a target stock price of 340,000 won, saying, "In the second half of this year, we expect a lineup of artists without gaps in addition to the sequential discharge of BTS members."

What if NewJeans leave?

But what would happen to HYBE if Min Heejin and NewJeans leave? From an economic standpoint, the opposite would be more appropriate. This is because NewJeans' activities are bound to be limited. First of all, you cannot use the name "NewJeans," the fandom name "Bunnies," or all hit songs such as "Hype Boy" because all those rights belongs to HYBE. It's like the members who left the members who left the group Fifty Fifty cannot perform with the hit "Cupid," and the agency can create Fifty Fifty with the new members. For example, Min Heejin, who raised NewJeans, claims to be their "mother," but the parents with actual parental rights are Bang Sihyuk. And the rights of these agencies are getting stronger. It's because of the risks that companies have to bear when creating artists.

A representative of an agency that producers a lot of movies and dramas and has a lineup of famous actors recently said this while producing an idol group for the first time. "When I made movies and dramas, I never used my own money, but I received investment to proceed, but for idol groups, every penny I spent on food was my own money."

When it come to movies and dramas, investors can be attracted by just one actor, director and writer. However, most idol group members are rookies, and even if a famous composer or choreographer is added, it is not easy to attract investors. It is a project that cannot guarantee success.

What do investors think of CEO Min Heejin?

Just as the court has already nailed that Min Heejin sought independence from HYBE. It was an open secret in the industry that Min wanted to come out of HYBE. Everyone was interested in "When will Min Heejin come out of HYBE?" But an official from another company said this. 

"CEO Min, it's going to be hard to get out of HYBE. Wouldn't it be hard to find someone who would spend as much money for NewJeans or singers like chairman Bang?"

Input and output are hard to gauge in the entertainment industry. However, if you cut back on investment, you can notice it easily. To Bang, NewJeans is still his child.

Currently, CEO Min is the most famous person in the entertainment industry. Will she be able to meet good investors if she just goes out? The investors I have met have quite different reactions.

First, owner risk. On the day Min became the most famous person in South Korea with her first press conference in April, a famous investor who met her privately said,

"Do you know what investors hate the most? You can use my money to backfire. You can lose your money. That's what investing is like. But you can't betray me with that money."

"The second is my attitude as a producer. Worldwide, it is a virtue for producers not to come forward. What should shine the most is the 'artist'. That's why the BTS songwriter PDogg and choreographer Son Seong-deuk, Seventeen's Han Sung-soo, and Le Sserafim's Kim Seonghyun all humbly said, "I didn't do anything. It's all done by artists." In particular, the biggest weakness of the K-Pop industry is that it is a group created. CEO Min's emphasis that "NewJeans is the success I created" is a part that degrades the group's value. Kenzie, who has been called a "real mother" by SM Entertainment and has written and produced numerous hits including Girls' Generation, EXO, SHINee, and Aespa, has avoided media exposure to the extreme, saying, "I hate being called a K-Pop mother the most. Good parents do not emphasize it. I raised them well."

At this Weverse Con, singers from HYBE performed a special tribute performance for JYP Entertainment founder Park Jinyoung. This is said to have been achieved by Bang Sihyuk's proposal to Park Jinyoung when he appeared in tvN's "You Quiz On The Block" with JYP founder Park Jinyoung in November last year. The success of NewJeans now is not achieved by CEO Min alone. It is the result of Park Jinyoung knocking on Bang Sihyuk and the U.S. market, tears shed while taking girl group Wonder Girls around the U.S., and the years he had spent traveling around Asia with BoA when founder Han Sung-soo was BoA's road manager. On that foundation, BTS and Blackpink blossomed, and as a result, younger groups are moving around the world stage more comfortably. To TWS, is Park Jinyoung a great-grandfather? That's why their performance together made me cry.

Original article: Daum