BIG4 suffers huge losses due to HYBE X SM affair

SM, JYP & YG suffer significant market cap losses due to HYBE’s battle to acquire SM. The experts are discussing a solution!

The market capitalization of the BIG4 agencies dropped significantly within a day of the end of the battle won by KAKAO to take over SM Entertainment.

According to the Korea Exchange on March 14, JYP Entertainment fell 6,600 won (8.49%) compared to the previous trading day (10th) to close at 71,100 won per share, while YG Entertainment closed at 54,600 won, down 2,900 won (5.04%). .

Despite not participating in the fight to acquire SM Entertainment, shares of JYP and YG rose amid intense competition as the three companies are ranked as the top four entertainment agencies in Korea along with HYBE.

Notably, shares of JYP rose 7.76%, from 72,100 won on Feb. 1 to 77,700 won on March 10. During the same period, YG shares rose 10.57% to surpass 52,000 won.

However, when news broke of a sudden deal between HYBE and Kakao, all gains were reversed on the 13th. On the same day, SM stock plummeted 23.48%. The four companies suffered a total market cap loss of 870 billion won (5.82%) in a single day.

On the 13th, SM’s market cap declined, dropping SM from 5th to 9th place in the KOSDAQ market. With the exception of HYBE, whose market cap rose on a rebound in share prices, SM, JYP and YG all lost significant amounts. Shares of other entertainment companies such as CUBE Entertainment and CJ ENM also fell.

Based on an analysis of major entertainment companies, investment firms have raised their price targets.

Regarding JYP, Park Sung Guk, a researcher at Kyobo Securities, believed that the increase in album sales for Stray Kids’ first full Japanese album and earlier works, as well as the increase in album sales and the expansion of TWICE’s tour were favorable factors . Our goal is to increase the share price by 8.04% to 94,000 won.

Choi Jong Gyeong, a researcher at Hana Financial Investment, predicted that BLACKPINK’s world tour, which will span 56 shows and be the longest world tour, will have a significant impact and the IPs of TREASURE and BABYMONSTER will also grow strongly. They raised the stock’s target price by 22.95% to 75,000 won.

Park Soo Young, a researcher at the Hanwha Research Center, mentioned and analyzed SM’s plan to start a girls’ group and two boys’ groups later this year “IP’s production and profitability improvement strategy, based on the SM 3.0 strategy, is positive for the share price and performance.” The stock’s target price is 135,000 won, up 21.62%.