K-pop superstars BTS become multimillionaires after Big Hit shares surge in South Korea
- Big Hit Entertainment’s shares soared on the first trading day before receding, valuing the South Korean agency at about US$7.6 billion
- The company says it will use the money raised to pay off debts, expand its business by acquiring music labels and foster artists in different countries
The company’s shares soared to the day’s limit high of 351,000 won (US$305) on the first trading day after going public, up from an initial offering price of 135,000 won (US$118). It receded on profit taking to close 26 per cent down at 258,000 won (US$225).
After being valued at more than 11 trillion won (about US$10 billion) at one point in the day, the total valuation after closing on Thursday was 8.7 trillion won (US$7.6 billion).
This makes BTS members multimillionaires, with each granted shares as much as 24 billion won (US$20.94 million) each.
“The bright side of Big Hit Entertainment is that it is tied to BTS through a contract, while the dark side is that most of its sales come from BTS,” said analyst Lee Hyo-jin of Meritz Securities, whose target prices were at the lower end of the scale.
Big Hit Entertainment raised 962.6 billion won (US$840.2 million) with the 7.13 million shares it issued in its initial public offering – 60 per cent of which went to institutional investors, with 20 per cent to company employees and the remaining 20 per cent to individual investors.