BTS Fans Scrambling to Buy Shares in Blockbuster IPO of Band's Music Label
The management label of superstar K-pop group BTS is going public this month and fans are rushing to secure even one share of the highly valued stock.
ALSO READ: IPO
Shares of Big Hit Entertainment’s initial public offering (IPO) are priced at 135,000 won ($115) each, the top end of an indicative price range of 105,000 to 135,000 won, multiple news outlets said, citing the company’s regulatory filing. With 7.13 million new shares, Big Hit is expected to raise a massive 962.6 billion won ($827 million). It is South Korea’s biggest-ever IPO since Celltrion Healthcare raised 1 trillion won in 2017.
At that price, Big Hit’s market capitalization will reach about 4.8 trillion won when its shares start trading on October 15. According to Nikkei, that would put the company just outside of the top 50 stocks in South Korea’s benchmark Kospi index, putting it in the same level with LG Uplus, the country's third-largest telecom company.
The IPO is expected to boost the fortunes of Big Hit CEO Bang Si-Hyuk, who is widely credited for forming BTS in 2013. Owning about 43 percent of of the company, the IPO will make Bang a billionaire.
Additionally, the seven members of BTS will also become multi-millionaires after they each received 68,385 shares last August. Those shares are now worth about $7.9 million each at issue price.
The band scored a milestone when its song “Dynamite” hit No. 1 on the Billboard 100, the first-ever from a South Korean group.
The success has led many of the band’s fans, who call themselves Army, scrambling to buy shares in the IPO.
Most will likely be disappointed. About 60 percent of the offering will be sold to institutional investors, while only 20 percent will be available to retail investors and its employees, according to Nikkei.
After it goes public, Big Hit will become South Korea's largest entertainment agency, bigger than the three major agencies of JYP Entertainment, SM Entertainment, and YG Entertainment put together.
ALSO READ: IPO
BTS has exploded in popularity in recent years, with many comparing their breakout success to The Beatles. In fact, the South Korean group matched a record by the Beatles (and the Monkees) by being one of only three groups in 50 years to have three number one albums on the Billboard 200 charts in less than 12 months.