[Market Focus] SM Rises on News of Tencent Stake Acquisition

SM showed strong performance in early trading on May 28. Investor sentiment appears to have improved following news that China’s Tencent has acquired a stake in SM.

As of 9:15 a.m. on the same day, SM shares on the KOSDAQ market were trading at 137,900 won, up 6.16% from the previous trading day. After opening at 132,600 won, the stock rose as high as 139,500 won during intraday trading, marking a new 52-week high.

On the previous day, SM announced in a regulatory filing that it had sold 9.66% of its shares in SM (2.21 million shares), previously held by HYBE, to Tencent Music at 110,000 won per share. This price is 15.3% lower than the closing price of 129,900 won on that day. HYBE, which was previously the second-largest shareholder of SM, has ended its relationship with the company through this share sale.

With Tencent Music acquiring a stake in SM, there are expectations that SM’s business activities in China will gain momentum. Tencent has been strengthening its cooperation with domestic entertainment companies by successively acquiring stakes in firms such as Kakao Entertainment and YG Entertainment.