The reason why ‘BIGHIT’ is trending after HYBE acquires shares from SM Entertainment
On February 22, 2023, HYBE officially became the majority shareholder of SM Entertainment after formalizing the purchase of 14.8% of Lee Soo Man’s shares.
Despite the conflict between SM management and Lee Soo Man/HYBE, the deal went through. To reassure SM fans, artists and shareholders, HYBE has published an open letter revealing its plans.
In the midst of this situation, a rather unexpected keyword has emerged in Twitter trends: “Bighit”.
Amid all this situation, fans of SM artists are particularly concerned, but so are fans of HYBE artists like TXT or BTS.
However, fans noted they seemed safe and praised Bang Si Hyuk for the independent BIGHIT MUSIC 2021 ahead of the Ithaca merger.
While some expressed relief, others expressed confusion at how independent BIGHIT would be and the impact it would have on SM Entertainment.
HYBE is a company and acts as the umbrella company for many different subsidiary labels, including BIGHIT, BE:LIFT, ADOR, Pledis and Source Music. All artists under the various labels work within HYBE but are operated by their own subsidiaries.
It is important to understand that HYBE made BIGHIT Music independent and made the label a private label, separating the artists under the HYBE label, although BIGHIT remains a subsidiary of HYBE.
Consequently, no external actor has the opportunity to be involved in the decisions of the label (here BIGHIT), even if it is part of another HYBE label (e.g. Scooter Braun).
100% of BIGHIT MUSIC shares go to HYBE, so anyone can buy BIGHIT MUSIC shares. Only HYBE has the ability to transfer its BIGHIT MUSIC Shares or make the decision to issue new BIGHIT MUSIC Shares to others.
HYBE is a public company. As a result, it is possible that others may acquire a significant interest in HYBE and then exercise influence over the operations of BIGHIT MUSIC, since BIGHIT MUSIC is a subsidiary of HYBE. However, there are currently no concerns in this regard.
For what ? Unless HYBE decides to change its structure significantly, the labels will continue in the current manner.
In addition, Bang Si Hyuk remains the majority shareholder with 31.8% of the shares alone.
By comparison, SM is mostly held by minority shareholders and it’s much easier for another investor to acquire a larger stake in the company, which HYBE did by acquiring 14.8% of SM’s shares.
So fans of BIGHIT artists have peace of mind because a situation like the one currently happening to SM is unlikely to happen to HYBE/BIGHIT unless there is a major change in the structure of the company.
However, this doesn’t seem to be in the company’s sights.