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Will Big Hit end IPO craze?

Big Hit Entertainment founder and CEO Bang Si-hyuk, left, poses for a photo with Korea Exchange CEO Jung Ji-won during a ceremony held to commemorate the entertainment company's listing on the stock market, Thursday, Seoul. / Yonhap
Big Hit Entertainment founder and CEO Bang Si-hyuk, left, poses for a photo with Korea Exchange CEO Jung Ji-won during a ceremony held to commemorate the entertainment company's listing on the stock market, Thursday, Seoul. / Yonhap

It's still too early to say IPO overheat has ended with Big Hit's dismaying first-day performance: experts

By Anna J. Park

It was a disappointment that the stock price of newly listed Big Hit Entertainment ― the management company of superstar K-pop group BTS ― ended at 258,000 won ($225.60) at Thursday's close, a 4.44 percent fall from its initial starting price of 270,000.

The stock started strong as its initial price was determined at 270,000 won ― double its subscription price of 135,000 won ― and instantly hit the price ceiling of 30 percent up at 351,000 won just 10 minutes after the market opened.

But the price then continued to move in a downward trend, breaking the initial price point four hours after the market's opening. The price went as low as 253,000 won at 3:20 p.m., 10 minutes before the market's official close at 3:30 p.m., before a last minute rise to 258,000 won at the close.

Given that Thursday was the first trading day of the K-pop entertainment company's much-expected IPO, market watchers and investors expected the company's stock would hit the price ceiling of 30 percent jump from the initial price, as the company was one of the biggest IPOs on Korea's benchmark KOSPI this year, drawing attention and interest from investors both within and outside the country.

Back in late June, SK Biopharmaceuticals' stock price hit the 30 percent price ceiling increase for three consecutive days. Kakao Games' stock also recorded two days straight of hitting the upper price limit. That's why market watchers and investors expected the Korea-headquartered entertainment company's stock would at least hit its ceiling on its first day of trading.

With the company's rather dismaying first day moves, other entertainment companies' stocks, including JYP Entertainment, SM and YG, also plunged by 5.29 percent, 6.73 percent and 6.75 percent, respectively.

However, market insiders say it's still too early to judge that the recent market craze over IPOs, as witnessed with SK Biopharmaceuticals and Kakao Games' strong starts and powerless falls within just a few months, has ended with the disappointing first-day performance.

"Today's stock market showed a joint plunge of major biopharmaceutical stocks, which could have been a trigger that induced market investment sentiment to fall. But it's too early to say whether the IPO overheating surrounding the local stock markets has ended," an analyst said on condition of anonymity.


Big Hit Entertainment founder and CEO Bang Si-hyuk, left, poses for a photo with Korea Exchange CEO Jung Ji-won during a ceremony held to commemorate the entertainment company's listing on the stock market, Thursday, Seoul. / Yonhap
Big Hit Entertainment founder and CEO Bang Si-hyuk, left, poses for a photo with Korea Exchange CEO Jung Ji-won during a ceremony held to commemorate the entertainment company's listing on the stock market, Thursday, Seoul. / Yonhap

It's still too early to say IPO overheat has ended with Big Hit's dismaying first-day performance: experts

By Anna J. Park

It was a disappointment that the stock price of newly listed Big Hit Entertainment ― the management company of superstar K-pop group BTS ― ended at 258,000 won ($225.60) at Thursday's close, a 4.44 percent fall from its initial starting price of 270,000.

The stock started strong as its initial price was determined at 270,000 won ― double its subscription price of 135,000 won ― and instantly hit the price ceiling of 30 percent up at 351,000 won just 10 minutes after the market opened.

But the price then continued to move in a downward trend, breaking the initial price point four hours after the market's opening. The price went as low as 253,000 won at 3:20 p.m., 10 minutes before the market's official close at 3:30 p.m., before a last minute rise to 258,000 won at the close.

Given that Thursday was the first trading day of the K-pop entertainment company's much-expected IPO, market watchers and investors expected the company's stock would hit the price ceiling of 30 percent jump from the initial price, as the company was one of the biggest IPOs on Korea's benchmark KOSPI this year, drawing attention and interest from investors both within and outside the country.

Back in late June, SK Biopharmaceuticals' stock price hit the 30 percent price ceiling increase for three consecutive days. Kakao Games' stock also recorded two days straight of hitting the upper price limit. That's why market watchers and investors expected the Korea-headquartered entertainment company's stock would at least hit its ceiling on its first day of trading.

With the company's rather dismaying first day moves, other entertainment companies' stocks, including JYP Entertainment, SM and YG, also plunged by 5.29 percent, 6.73 percent and 6.75 percent, respectively.

However, market insiders say it's still too early to judge that the recent market craze over IPOs, as witnessed with SK Biopharmaceuticals and Kakao Games' strong starts and powerless falls within just a few months, has ended with the disappointing first-day performance.

"Today's stock market showed a joint plunge of major biopharmaceutical stocks, which could have been a trigger that induced market investment sentiment to fall. But it's too early to say whether the IPO overheating surrounding the local stock markets has ended," an analyst said on condition of anonymity.


Park Ji-won annajpark@koreatimes.co.kr


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