The stock price of HYBE plunges 21% due to shock from BTS’ activity suspension
As the global idol group BTS declared that they would suspend their activities, the stock price of HYBE, the entertainment company to which BTS belongs, has plummeted more than 21%.
As of 9:07 AM on June 15th, The stock price of HYBE is trading at 151,500 won, down 41,500 won (-21.50%) from the previous day. The possibility of a “lower limit” (-30%) cannot be ruled out.
Last night, BTS announced through their official YouTube video that they would temporarily suspend their group activities. At a dinner celebrating the group’s anniversary, BTS told fans that they had decided to take a long break and work on solo projects.
Member Jimin explained, “We’re trying to find our identity. It’s a difficult and long process.” Lee Ki-hoon, a researcher at Hana Financial Investment, said, “The issue of revising the Military Service Act or military service exemption, which allows popular culture artists to serve alternative services, is prolonged. Since the members’ enlistment methods and timings are uncertain, enlistment can resolve the uncertainty before the bill is processed.”
He added, “Performance estimation is based on the assumption that BTS members will join the army, and it is assumed that high growth will continue until 2024 as there will be a gap in performance between 2025 and 2026 when four members enlist. The most conservative scenario assumes that all 7 people will join the military in early 2023.”
Hana Financial Investment estimated that the decrease in BTS-related sales in 2023 would be about 750 billion won, albums and tours would be about 500 billion won, and indirect sales such as MD (related products) would be about 250 billion won. Reflecting this, the expected sales and operating profit for 2023 are 1.6 trillion won and 200 billion won, respectively. The operating profit margin (OPM) is around 12%.