Consistently Weak After Conflict Trigger... Fell Over 12%
Foreign Media: "An Incident That Hit the K-pop Industry"
HYBE's stock price plummeted more than 12% following a dispute with the management of its subsidiary label ADORE, resulting in a market capitalization loss of over 1.2 trillion KRW. Consequently, foreign media are closely monitoring the situation.
According to the Korea Exchange on the 27th, HYBE closed at 201,500 KRW on the 26th. This marks a 12.58% drop from 230,500 KRW over the past week. After falling nearly 8% on the 22nd and partially rebounding midweek, the stock fell again by nearly 5% the previous day, dipping below 200,000 KRW.
During this period (5 trading days), HYBE's market capitalization decreased from 9.6 trillion KRW to 8.3299 trillion KRW, a loss of 1.2079 trillion KRW. The decline began after news broke on the 22nd that HYBE had initiated an audit of ADORE's management, followed by a protracted mudslinging battle between ADORE CEO Min Hee-jin and HYBE.
Other 'Big 4' entertainment companies, including SM, YG, and JYP, showed little change during the same period. Over the last five trading days, SM rose 3.7%, JYP increased 2.5%, while YG fell 4.2%.
Min Hee-jin, CEO of ADOR, is making a statement at a press conference held on the afternoon of the 25th at the Korea Conference Center in Seocho-gu, Seoul. [Image source=Yonhap News]
HYBE claims to have detected signs that CEO Min is attempting to seize control of ADORE's management and has secured evidence that Min's side discussed terminating NewJeans' contracts during this process. HYBE filed a complaint with the Yongsan Police Station the previous day, accusing Min of breach of duty.
In response, HYBE CEO Park Ji-won stated, "This incident occurred during the process of upgrading our multi-label system, and we apologize for causing concern to fans, artists, and staff." Min and other top executives hold a 20% stake in ADORE, while HYBE owns 80%.
Foreign media are also paying attention to the HYBE incident. Music outlets such as Billboard and AFP reported in detail on Min's press conference on the 25th (local time). Billboard noted, "Min held an emotional press conference lasting over two hours," and reported that "both sides have entered a war, each claiming to act in the 'best interest of NewJeans' ahead of their comeback." AFP also covered HYBE's revelation that Min received management coaching from a shaman.
Reuters described the incident as "the latest event to hit the profitable K-pop industry," stating that "HYBE's internal conflict has dampened expectations for NewJeans' new release and the return of some BTS members." It also mentioned internal strife triggered by Kakao's acquisition of SM Entertainment and the dispute between girl group Fifty Fifty and their agency ATTRAKT.
CNBC detailed HYBE's multi-label strategy, reporting that "while the flagship idol BTS is on hiatus due to members' military service, subsidiary labels like ADORE have driven HYBE's revenue." However, as seen in this incident, internal conflicts between HYBE and its labels may undermine the previously successful formula.
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