The World’s Biggest Boy Band Goes Public

BTS Popularity Rivals American Star Power

Despite working in an industry turned upside down by the pandemic, K-Pop sensation BTS has managed to keep the hits coming. The band’s management company, Big Hit Entertainment Co., went public on Thursday in South Korea. On the first day of trading, shares of the newly minted public company jumped over 90%, valuing the entity at $8.5 billion. For context, record label giant Warner Music Group (WMG) is worth $15 billion, but it’s several decades older than Big Hit Entertainment. Live Nation Entertainment (LYV), another powerhouse in the industry, is worth around $12 billion.

The IPO is well timed. In August, BTS landed its first English-only single, “Dynamite” on the Billboard Hot 100 chart. The song spent two weeks in first place, slipped briefly, then climbed back to the top spot again in late September. In 2019, when the band could still play concerts in sold-out stadiums, they generated $170 million from touring. The only American band to make more money on tour was Metallica.

Investors both big and small saw those numbers and jumped. Small traders ordered 600 times more shares than were available to them, and the big investment firms ordered 1,100 times the shares reserved.

Young Investors Lead the Way

The South Korean stock market has been buoyed this year by an influx of hundreds of thousands of new investors. Interestingly, they’ve been inspired by YouTube stars. Currently, many young people feel disheartened by their financial prospects and the sputtering economy. Online personalities have talked up investing as a way to earn and save on top of their day jobs.

Big Hit Entertainment’s successful IPO also fits into a larger trend taking place in South Korea and around the world. After a lull, just like in the US, startups in South Korea have been looking to capitalize on a wave of investor interest. For instance, when videogame company Kakao Games Corp. launched its IPO in September, shares quickly doubled in price and hit the daily limit on the first trading day.

Some think the market may be getting ahead of itself. An analyst from Meritz Securities said the hot South Korean stock market is driving entertainment stock prices too high.

Awaiting Concerts—and Military Service

Despite BTS’s global popularity, Big Hit Entertainment’s business model is causing some to worry, mostly because of its virtually singular revenue source. In the first half of 2020, BTS comprised almost 90% of Big Hit’s sales—a big risk if BTS’s popularity cools before the company can secure stars of equal size. Investors are banking on sold-out concerts after the pandemic ends.

BTS could also be forced to hit pause soon, as the members will have to participate in 18 months of military service, which is mandatory for most South Korean men. Hopefully for Big Hit, BTS, and new investors, that pause will come after the band makes a triumphant return to the post-pandemic stage.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.

TLS 1.2 Encrypted
Equal Housing Lender