K-Pop Mastermind Surprised BTS Break, Dealt $2.6 Billion Blow


K-Pop Mastermind Surprised BTS Break, Dealt $2.6 Billion Blow

For the seven-member Korean pop sensation BTS and its throngs of admirers around the world, it was intended to be a day of joy rather than sadness.

The organisation was riding higher than it had ever been as it approached its annual "Festa" in many respects. They visited the White House in their finest black-tie attire, performed for more than 200,000 people in Las Vegas, and issued the album "Proof," which served as a tribute to their biggest successes and brought in millions of dollars for their sponsors.

Around a table surrounded by a large number of purple balloons, the pop singers chatted, ate, drank, and remembered for more than 30 minutes. J-Hope, the group's multi-talented rapper, dancer, and vocalist who had just made history by being designated the headliner at Chicago's Lollapalooza festival, dropped the bombshell that all seven of the members were leaving the group after being made fun of for appearing drowsy.

The group's fervent following, known as the BTS Army, viewed the break as the end of an era. Bang Si-hyuk, the South Korean millionaire who founded the boy band that captivated the globe, saw his fortunes decline along with it.

Following BTS's statement, shares in Bang's Hybe Co. fell 25% in a single day, prolonging the company's months-long decline and reducing Bang's wealth by $2.6 billion since its November peak to $1.2 billion, according to the Bloomberg Billionaires Index. Hybe Co. was created by Bang. Even though BTS has stated that they will one day rejoin, the stock touched a record low on Wednesday.

According to widely read K-Pop journalist Jeff Benjamin, "Hybe is the mansion that BTS created." "Even if it might not be that different, people will worry when the flagship artist or product changes."

After working as a music producer, Bang, who owns 31.8% of Hybe, started the business. Before the local group 8Eight's song "Without a Heart" from 2009 gave it its first hit, the company nearly went out of business in its early years. 2013 saw the debut album from BTS.

After the business' IPO in 2020, when BTS had already collaborated with Halsey, Nicki Minaj, and Steve Aoki, made appearances on "The Tonight Show Starring Jimmy Fallon" and "Saturday Night Live," and had fans camped out for days before a free concert for "Good Morning America," he unexpectedly became a billionaire. The band members, who were all in their 20s, also received interests worth millions of dollars through the IPO.

Online videos, streaming services, and record sales allowed BTS to prosper during the Covid-19 shutdowns, as well as the entire industry. After the virus subsided, the madness intensified. Four live concerts were recently held in Las Vegas and drew admirers from all around the world. All of the tickets were purchased by ARMY members before they were made available to the general public. ARMY members pay a fee to gain access to exclusive pre-sales, special items, content, and more. As attendees stocked up on themed caps, t-shirts, and light sticks, known as the Army bomb, desperate fans paid up to $15,145 for premium seats on the secondary market.

According to Meritz Securities Co., Hybe's sales increased by 58 per cent last year to close to 1.3 trillion won ($1 billion), with the label that manages BTS accounting for about 70% of its operating profit. From their 2020 listing until a climax in November, the shares more than quadrupled.

Concerns were raised about Hybe's reliance on BTS

 The corporation has made an effort to diversify by bringing on new artists and going into new markets. In order to sell non-fungible tokens, it collaborated with the owner of South Korea's largest cryptocurrency exchange and acquired Ithaca Holdings, a US media company that represents artists including Justin Bieber and Ariana Grande. The collaboration handed both musicians millions of dollars' worth of Hybe shares last year.

BTS's break is still a loss even though it's too early to tell how successful these other endeavours are. The operating profit forecasts for Hybe were reduced by SK Securities Co. by 9% to 234.9 billion won for 2022 and by 24% to 273.2 billion won for 2023. When the separate projects of BTS's members begin, according to analyst Hyo-ji Nam, the projections could grow.

      Attempts to reach a Hybe representative for comment were unsuccessful

Even if Hybe reforms, the musicians' two years of mandatory military service raises questions about the band's future. Compared to the agencies JYP Entertainment Corp., SM Entertainment Co., and YG Entertainment Inc., the company's shares are down 60% this year.

Hyunyong Kim, an analyst at Hyundai Motor Securities Co., said of Hybe, "It's not about how they will minimise their need on BTS," adding that the two are too intertwined to be separated. It depends on how effectively they will handle any risks associated with serving in the military.

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