[Weekly HOT Stocks] BigHit, Individual Investors Net Buy 400 Billion KRW... Stock Price Drops

On the First Day of Listing, Big Hit's Trading Volume Approximately 6.56 Million Shares... Trading Value 1.9562 Trillion KRW

On the first day of Big Hit Entertainment's KOSPI listing on the 15th, Bang Si-hyuk, Chairman of Big Hit Entertainment (left), and Jung Ji-won, Chairman of the Korea Exchange, are taking a commemorative photo at the listing ceremony held in the lobby on the first floor of the Korea Exchange in Yeouido, Seoul. / 2020.10.15. Photo by Joint Press Corps

[Asia Economy Reporter Geum Bo-ryeong] Big Hit Entertainment, which was listed on the KOSPI market on the 15th, received concentrated attention in the market for a week. In the two days following the listing, individual investors purchased stocks worth 400 billion KRW.

According to the Korea Exchange on the 18th, Big Hit ranked first among the top stocks by net purchases of individual investors from the 12th to the 16th. Considering that Big Hit was listed on the 15th, individual investors net purchased Big Hit stocks worth 403.8 billion KRW in two days.

Big Hit was regarded as one of the biggest IPOs in the second half of the year and showed successful performance. During the general subscription held on the 5th and 6th, the integrated competition rate was finally 606.97 to 1, and the subscription deposit amounted to 58.4237 trillion KRW. This surpassed the previous record set by SK Biopharm with a competition rate of 323 to 1 and a subscription deposit of about 31 trillion KRW, setting a new record for the highest performance on KOSPI. In the demand forecast conducted for domestic and foreign institutional investors on the 24th and 25th of last month, a total of 1,420 institutions participated, showing a competition rate of 1,117.25 to 1.

On the first day of listing, Big Hit achieved the so-called 'ttasang' by forming an opening price twice the public offering price and hitting the upper limit price, but as selling pressure for profit realization poured in, it closed at 258,000 KRW, down 4.4% from the opening price. The trading volume of Big Hit on the 15th was about 6.56 million shares. The trading value reached 1.9562 trillion KRW.

On the following day, the 16th, the trading volume was 4.5 million shares, and the trading value was 972.1 billion KRW. The closing price fell 22.29% (57,500 KRW) from the previous day to 200,500 KRW.

Investors’ sighs are only increasing. Seo Mo (39), an office worker who participated in the Big Hit general subscription this time, said, "I invested expecting a ttasang-sang, but as the stock price keeps falling, I am wondering whether to sell," adding, "I plan to keep checking how the trend goes from the 19th." On online stock discussion boards, countless posts such as "It’s a graveyard for retail investors" and "I hope BTS (Bangtan Sonyeondan) gets military exemption" have been posted.

Before Big Hit’s listing, the market showed mixed views on the appropriateness of the public offering price (135,000 KRW). Many pointed out the excessive dependence on BTS’s income. Regarding this, Big Hit also explained in the investment prospectus, "If the popularity of artists declines or activities are suspended in the future, resulting in a sharp decrease in sales related to our major artists, profitability may decrease."

So far, the target prices for Big Hit set by securities firms are 160,000 KRW by Meritz Securities, 212,000 KRW by Ebest Investment & Securities, 260,000 KRW by Hanwha Investment & Securities, and 264,000 KRW by Hyundai Motor Securities.