K-pop boy band BTS / Courtesy of HYBE

The share prices of Korea's four major entertainment companies — HYBE, SM Entertainment, YG Entertainment, and JYP Entertainment — are continuing to fall well into 2024, despite the sustained global popularity of their artists.

The downward trend in share prices, according to analysts, Wednesday, is partly due to top-selling artists, such as BTS from HYBE and BLACKPINK from YG, being on hiatus.

The absence of these artists has impacted the profitability of K-pop powerhouses, particularly in the second quarter, when their earnings fell significantly short of market expectations, the analysts explained.

Additionally, gossip and scandals involving the artists and their CEOs are contributing to the decline in stock prices. Record labels and entertainment companies are classified as "celebrity stocks," meaning their share prices are heavily influenced by the public image and activities of their stars and executives.

Members of the K-pop girl band BLACKPINK pose at the premiere of their world tour film "Born Pink," marking the group's eighth anniversary, in Seoul, Aug. 9. Reuters-Yonhap

According to the Korea Exchange (KRX), HYBE experienced its fourth consecutive losing session on the benchmark KOSPI, Wednesday, falling 4.56 percent to close at 163,100 won ($119.88).

HYBE's stock price has fallen around 30 percent since the start of 2024.

Among its three other peers listed on the secondary Kosdaq, SM Entertainment marked its fifth consecutive losing day, with a 2.84 percent drop, closing at 64,900 won.

YG Entertainment declined for the second consecutive day, ending at 34,700 won, while JYP Entertainment fell for the fourth straight day, closing at 50,300 won.

As of Tuesday, SM Entertainment has fallen 28.4 percent since the beginning of the year, YG Entertainment has dropped 26.6 percent, and JYP Entertainment has plunged 46.1 percent.

"It appears that the sluggish performance of the K-pop agencies is likely to continue for the next couple of months," Kim Hyun-yong, a researcher at Hyundai Motor Securities, said.

He noted that HYBE, being the highest-priced stock among the four agencies, significantly influences overall investor sentiment in the industry.

The company is struggling as six of the seven BTS members are currently away from the music scene for military duty or alternative service.

The boy band's leader, Jin, is the only member who has completed the 18-month service, having been discharged in June.

YG extended its contract with BLACKPINK for group activities in January, maintaining the girl band's four-member lineup. However, none of the members renewed their contracts for individual activities and are now pursuing solo careers outside the agency.

"YG's earnings heavily rely on BLACKPINK as a united group, meaning it needs to wait for the members to work as a whole," Kim said.

In terms of gossip and scandals, HYBE Chairman Bang Si-hyuk has been frequently implicated in controversies that have adversely affected the company's stock price.

Bang Si-hyuk, center, chairman of HYBE, walks down a street in Los Angeles, Calif., with BJ Kwajeup Seyeon, left, and her sister. Captured from 'I Am Walking' YouTube channel

The latest incident involved Bang, who is in his early 50s, being seen with provocative influencers in their 20s in Los Angeles last week.

Although the incident was not morally wrong, it prompted criticism from investors. This came on the heels of a previous public dispute between Bang and Ador's CEO Min Hee-jin, which had already raised concerns about Bang's business management capabilities.

BTS member Suga's recent involvement in a drunk driving incident and BLACKPINK member Jennie's allegations of smoking indoors also stirred controversy, frustrating many fans and investors.