Stock Plunge at HYBE After NewJeans' Remark... 'Min Hee-jin VS Corporate Value' Dilemma

NewJeans hints at exclusive contract termination... Stock price falters
Financial risks likely to increase if legal disputes arise

Five NewJeans members broadcasting live on YouTube.
[Photo by YouTube capture]

Idol group NewJeans caused the company's stock price to falter after making explosive remarks against their agency HYBE. They demanded the return of former ADORE CEO Min Hee-jin, and the impact was significant enough to affect the company's valuation.

The HYBE stock price reflected this, plunging as much as 6% during trading on the 12th, the day after NewJeans' live broadcast was released. The closing price on the same day fell by 2.82%, and the stock price continued to decline without rebounding afterward.

The reason NewJeans' remarks could influence the stock price is due to their growth potential and substantial contribution to HYBE's sales. The label ADORE, to which NewJeans belongs, recorded sales of 110.3 billion KRW and a net profit of 26.5 billion KRW last year. This accounted for 10% of HYBE's domestic six-label sales and 11% of net profit. In particular, sales showed a steep growth, increasing more than fivefold compared to the previous year (18.6 billion KRW).

CEO Min Hee-jin of ADOR has filed an injunction to prohibit the exercise of voting rights against HYBE, continuing the conflict between HYBE and CEO Min. The photo was taken on the 8th at HYBE headquarters in Yongsan-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

This is not the first time an artist's remarks have affected corporate value. In 2022, when HYBE's main artist BTS (Bangtan Sonyeondan) announced a halt to group activities, a similar case occurred. BTS announced a break for individual activities, and upon this news, HYBE's stock price plunged nearly 24% in a single day. BTS's global popularity had a significant impact on HYBE's sales and growth, so their announcement of halting group activities was received as a major shock in the market.

HYBE has regarded NewJeans as an asset to protect and an important artist. In this situation, NewJeans demanded the return of former CEO Min Hee-jin and hinted at possible legal action if the demand was not accepted, which became a negative factor for HYBE. The company now faces a critical decision. If HYBE refuses NewJeans' demand and a legal dispute arises, it could further increase HYBE's financial risk. The fact that a legal lawsuit with former CEO Min is currently ongoing adds to the burden. If a lawsuit with NewJeans also occurs in this situation, HYBE would face a dual legal front.

Industry insiders evaluate the cases of NewJeans and BTS as examples directly linked to corporate financial stability and stock prices. It indicates that the influence of artists on company management has become stronger than ever.

An industry official said, "It suggests the need for higher strategic thinking in managing relationships with artists," and predicted, "HYBE's response will be an important turning point for the future direction of the K-pop market."