Summary of news: HYBE sells SM Entertainment shares 

  • HYBE sold 755,522 shares (3.2%) of SM Entertainment for 68.3 billion won ($50.2 million).
  • The sale reduces HYBE’s stake in SM to 9.38% and minimizes potential losses.
  • Analysts believe SM’s strong artist lineup and potential for growth in China remain attractive.

In a recent after-hours block deal, HYBE, the powerhouse behind K-pop sensation BTS, disclosed the sale of 755,522 shares of SM Entertainment. This move, amounting to 25.46 percent of HYBE’s holdings in SM Entertainment, was announced just before the stock market opened on Tuesday, as reported by the Financial Supervisory Service.

The transaction, facilitated by Samsung Securities, transpired at a price of 90,531 won ($66.63) per share, totaling approximately 68.3 billion won. As a result, HYBE’s stake in SM Entertainment now stands at around 2.21 million shares.

Read: Kakao Entertainment & Billboard Join Force to advance K-pop worldwide

Subsequently, SM Entertainment’s stocks concluded at 90,700 won, marking a 5.32 percent decline from the previous trading day’s close.

Initially holding a minority stake of 12.45 percent with about 2.96 million shares, HYBE ventured into the acquisition by purchasing 14.8 percent of shares from SM Entertainment founder Lee Soo-man last February. Despite fluctuations in holdings due to strategic maneuvers, HYBE has opted to divest a significant portion of its shares amidst a surge in SM Entertainment’s stock prices.

The recent uptrend in entertainment stocks has been spurred by optimism surrounding potential easing of Chinese restrictions on Korean content. Noteworthy developments include China permitting a Korean indie band to perform in Beijing, signaling a thaw in cultural relations between the two nations.

Read: “The Roundup: Punishment” Breaks Records with 11 Million Moviegoers

While concerns loom over HYBE’s residual stake in SM Entertainment, analysts like Douglas Kim from Smartkarma remain bullish on SM’s robust valuations, attributing its success to a diverse artist lineup and consistent market outperformance.

Source: Korea Times