Shares of Big Hit Entertainment, the management firm behind world-renowned K-pop boy band BTS, were priced at the top end of the range. According to a regulatory filing on Monday, Big Hit has priced its initial public offering (IPO) at 135,000 South Korean won apiece, approximately $115. Big Hit’s IPO is South Korea’s most extensive listing in three years.
The management’s valuation boasts higher than the value of S.M. Entertainment, JYP Entertainment, and Y.G. Entertainment combined. The pricing values Big Hit Entertainment at roughly 4.8 trillion won.
Interested investors and k-pop fans surge as Big Hit Entertainment is expected to debut its market in October. Interested institutional investors rush in more than 1,000 times the number of shares, as BTS’ song “Dynamite” reaches No.1 on the U.S. Billboard Hot 100, the first South Korean group to do so.
About 1,420 institutional investors expressed interest in the shares in the IPO through pre-subscription offers. According to the regulatory filing, the said investors were looking for 1,117 times the available shares, with roughly 98% willing to pay the top-range price or more.
With the announcement of Big Hit’s IPO pricing, entertainment stocks in South Korea shot up, with Y.G. Entertainment up by 12%, an increase in JYP Entertainment by at least 10%, and S.M. Entertainment higher by more than 7%.
“Big Hit is classified as a kind of global export firm. Not only has it proven its ability to use Youtube, social media for smart market infiltration, but it also has fandom platform Weverse which gives unprecedented clarity and control over its revenue sources for a label, and may grow into a true platform player as outside artists increasingly join.”
Park Sung-ho, analyst at Yuanta Securities Korea
The management firm reported a staggering 49.7 billion Won profit for the first half of 2020, approximately $42.4 million. Amid event cancellations due to coronavirus, Big Hit’s online concert and merchandise sales offset losses.
With subscriptions due in October, Big Hit is expected to raise 962.6 billion won ($820 million) through 7.13 million new share offers. Big Hit’s IPO is the biggest in South Korea, since Celltrion Healthcare 091990. K.Q. in 2017.
Analysts have projected gross bids to hit 100 trillion won or $85 million, the most popular South Korean IPO. Big Hit Entertainment will debut on the KOSPI on October 15.
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