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Bighit Ipo

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Last Updated: 02 July 2021

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On October 15, Big Hit Entertainment raised 963 billion won in South Korea's largest IPO since 2017. Their stock price opened at 270 000 won, more than double their IPO price of 135 000 won and closed at 258 000 won. Their day-one market cap sits at a hefty 7. 6 billion, making founder Bang Si-Hyuk South Korea's newest billionaire. Interestingly enough, even after pre-listing hype ease and with steady decline in stock price, Big Hits ' stock price has never dipped below the IPO price of 135 000 won. As of October 30, stock is valued at 142 000 won, with analysts saying this price is more reasonable and based on fundamentals of a company which relies heavily on one group for revenue. Indeed, Big Hits ' success can be mainly attributed to K-POP superstars BTS and their enormous fanbase, officially termed BTS ARMY. Since their debut in 2013 under Big Hit Entertainment, BTS has performed sell-out shows around the world and broken numerous Billboard chart Records. With their Love Yourself: Tear album in 2018, they became the first Korean group to Top the Billboard 200. They repeated the feat with Love Yourself: Answer and Map of Soul: Persona, which was the best-selling Korean album of all time until BTS Beat their own record with 2020s Map of Soul: 7. Similarly, on October 12, BTSs remix of Savage Love even Beat their own recent all-English single, Dynamite, to Top spot on Billboard Hot 100. In 2019, BTS sold 6. 21 million albums, while SEVENTEEN, next most popular group under Big Hit, sold 1. 45 million. In 2020, BTS will sell 4. 26 million copies of Map of Soul: 7, while SEVENTEEN sold 1. 2 million copies of their seventh mini album. It come as no surprise, then, that BTS account for 87. 7 percent of Big Hits revenue for the first half of 2020, and 97. 4 percent of Big Hits 2019 revenue. According to a September regulatory filing, seven members of popular boy band BTS receive 478 695 shares in the company in August 2020 to strengthen long-term partnership with major artists and boost morale; indeed, now that members of BTS are shareholders, Big Hit has essentially eliminated any uncertainty regarding future contract negotiations with Group. With IPO, BTS has earned 15. 4 million. In the music industry, this is actually a rarity-never have industry giants like Universal, Sony, or Warner give stocks to their artists. This transfer of equity is almost exclusively reserved for the likes of early startups, like Kobalt or Elektra, and IT could very well change industry paradigm. Looming issue for the group, however, is South Korea's mandatory 18-month military service for men: oldest member of the group must report for duty by the end of next year, and none of the other members have completed their military service, either. Some have speculated that Big Hit will either set up units with remaining members or pursue solo acts while they serve in the Military.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions

The K-pop model

Big Hit Entertainment debuted at double its initial public offering price on Thursday, valuing the management label of South Korean superstar K-Pop group BTS at 9. 6 trillion won. Big Hit, which relies heavily on boy band for revenue, opened at 2 70 000 won and was trading at 4 % above the offer price by late morning as investors sought a piece of the country's largest listing in three years. Listing helped revive the country's IPO activity this year after two subdue years, with volumes rising 51 % to 2. 9 billion so far this year, compared with the same period last year, according to Refinitiv data. Pipeline look strong after government stimulus to boost the economy amid coronavirus pandemic flood markets with cash, analysts say. Online Game developer Krafton, and chat app operator Kakao's mobile banking unit KakaoBank have both begun the preliminary process for listing. Big Hit float also makes seven members of BTS instant multimillionaires with each grant shares worth 18. 5 billion won at debut price. The Billboard Chart topping group, which has a huge global following, accounts for 87. 7 % of the label's revenue in the first half of 2020, according to a regulatory filing. Analysts say the company has proven itself extremely online savvy, using Youtube and social media for market infiltration since in-person performances were canceled because of the coronavirus pandemic. Bts' first paid online concert in June earned Guinness World Records title for most viewers for livestreamed performance, with a 7 57 000-strong audience from 107 countries. The label also has an unprecedented level of control over its revenue streams via its Weverse fandom platform that distributes BTS content and sells merchandise, which has potential to draw in other artists. The listing ceremony at Korea Exchange, attended by Big Hit founder and co-CEO Bang Si-hyuk, was broadcast live on the label's Youtube channel. Big Hit has a different business model than other big three K-Pop labels, JYP, SM and YG, said Nam Hyo-ji, analyst at KTB Investment & Securities. Although not completely free from the effects of COVID-19, it's freer than other labels. South Korean retail investors earlier this month laid out 58. 4 trillion won in orders for Big Hit shares, falling just short of the record 58. 55 trillion won for the retail portion of the Kakao Games' listing in September. Thursday's listing coincides with the US Billboard Music Awards taking place in Los Angeles, where BTS won the first of two Awards it was nominated for-Top Social Artist. Back home, calls are mounting for BTS members to be granted alternatives or delays to South Korea's mandatory military service, with some lawmakers and fans arguing they are doing plenty for their country without wearing a soldier's uniform. Under general rules, eldest member of the band will be required to sign up by the end of next year, with the remaining six over the following five years.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions

The Big Hit difference

K-pop companies going public isnt unique to Big Hit, as Paul Han, co-founder of K-pop news site allkpop. Com, explain to TIME. What is different is launch with relatively small market caps when they were small companies with a lot of room for growth. Big Hit is going public when theyre at top of K-pop, and their 10-figure market cap is larger than the Big 3 combine, Han say. I think it suggests a lot more capital investment will be pouring into K-pop so it can grow even further in the global market. In conclusion, Big Hit will open at roughly three or four times the current value of any of the storied Big three companies in the Korean Market, so it is going to be a vertiginous shift in scale for industry. In contrast, biggest two US record labelsUniversal, and Sonyare owned by larger management groups that publicly trade on different exchanges. Their music portfolios are just a slice of businesses. The third largest US Label, Warner Music Group, just IPOed this summer at a valuation of about 15 billion. Universal is expected to IPO at about double that, thanks to its powerful publishing arm and deal with Chinas Tencent. The scale of these legacy operations is considerable. They also each have made inroads as distribution platforms for K-pop groups, complicating competition. But Big Hit, like its Korean competitors, is much more than just a music label, and has room to grow in new directions. From the start, they have invested in developing proprietary technology platforms that connect their acts with fans, owning engagement experience from top to bottom. In the US, artists ' presence is often more atomized: they might manage their own social media while also lending their name to separate sponsorship deals and appearing on other media channels, from TV to streaming platforms, of which they have no ownership themselves. Fans may need to make a Ticketmaster account to buy show tickets, follow their website for new music updates and discover via ad that theyre promoting special meals at McDonalds, with little centralization. Connecting with Big Hit act, on other hand, is a fairly unified experience. To buy tickets to show or brand merchandise, fans need to download their app; to watch exclusive digital content, or to stream virtual concert, That also all happens on their own networks. Han see this breadth of Big Hits ownership as a critical piece of what sets their business strategy apart. Theyre letting investors know that theyre not one-trick pony and they have many avenues for growth, he say. That includes diversifying their portfolio with extra acts, as well as investing in their tech platforms and virtual performance opportunities.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions

Beyond Korea

SEOUL, South Korea South Koreas Big Hit Entertainment, company that manages global pop sensation BTS, had Dynamite trading debut Thursday in SEOUL, helped by the zeal of its loyal fans. Big Hit's shares nearly doubled after their initial public offering netted more than 800 million. A strong start was widely expected by analysts given the huge fan base for seven-member boy band that has been dominating Billboard charts. Its market value stands at about 7. 5 billion by the end of trading. Despite the concert-killing COVID-19 pandemic, Big Hit has prospered thanks to huge demand for its online content, including livestreamed BTS concerts that reportedly attract more than 1. 7 million fans. The company's shares opened at 270 000 won, about double their initial public offering price. They surged 30 %, hitting the daily trading limit, before falling back and closing at 258 000 won, bringing the company's valuation to 8. 7 trillion won. Big Hit has a tight grip over its revenue streams, with BTS merchandise and other products exclusively sold through its Weverse E-commerce platform. Big Hit raised 926. 6 billion won in what was South Korea's largest IPO since 2017. The company has managed to grow beyond traditional revenue sources of album sales and concerts and diversify its business through online channels, wrote Ahn Jin-ah, analyst from South Koreas E-Best Investment and Securities, in a report that describe Big Hits stock market entrance as drop of Dynamite. BTS account for more than 80 % of company revenue during the first half of 2020, according to a separate report by Samsung Securities. BTS launched in 2013 and has legions of global supporters who call themselves Army. It became the first K-pop act to top the Billboards Hot 100 chart last month with their first all-English song, Dynamite. A band consisting of J-Hope, RM, Suga, Jungkook, V, Jin and Jimin has performed in sell-out arenas around the world and was even invited to speak at the UN General Assembly last month. BTS is a source of national pride, with some lawmakers even arguing that its members should be exempt from 2-year military service that is mandatory for most able-bodied males, saying that singers have already done much for the country. Unlike many other K-pop artists whose carefully cultivated images are shaped by their management agencies, BTS members actively engage with their fans through social media and often write their own lyrics. That personal touch is a huge part of their appeal, music experts say. BTS fans who apparently follow everything and anything about the band naturally take interest in Big Hits ' stock market debut. Sara Ali, BTS fan from Sudan, said she had been talking with fellow Army members about Big Hits business prospects and was hoping to buy a few shares herself. I believe this is an excellent opportunity, she said through text message.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions

Sources

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions.

* Please keep in mind that all text is machine-generated, we do not bear any responsibility, and you should always get advice from professionals before taking any actions

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