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This week, BTS scored Korea’s first-ever no. 1 spot on the main U.S. Billboard music chart with breezy disco hit “Dynamite”. Their first all-English language single hit the spot for mainstream U.S. pop fans, with a Youtube video garnering more than 284 million views already.
Big Hit CEO and largest shareholder Bang Si-hyuk last month gave 478,695 common shares to the seven BTS members, or 68,385 per each, “to strengthen long-term partnership with major artists and boost morale”, Big Hit said in a regulatory filing on Wednesday.
Each BTS member would get 9.23 billion won of shares, or 64.6 billion won altogether, if the IPO is priced at the top of its range in October.
The stock gift may be interpreted as an attempt to bind the BTS members and the label more closely together, said Kim Hyun-yong, analyst at eBEST Investment & Securities.
Big Hit plans to offer about 7.1 million shares at an indicative price range of 105,000-135,000 won per share.
The pricing potentially values the company at up to 4.8 trillion won ($4.04 billion), considering convertible preferred stocks plus common shares, analysts said.
“The stock could perform well upon listing, as there’s a lot of liquidity in the market now… Then it depends on Big Hit’s results, but the lack of physical concerts due to COVID-19 will likely have negative impact,” said Nam Hyo-ji, analyst at KTB Investment and Securities.
Big Hit relies heavily on BTS, with some 87.7% and 97.4% of its revenue in the first half of 2020 and 2019 respectively coming from the group, the filing said.
With BTS members expected to enter mandatory military service for South Korean men in coming years, the label has worked to address market concerns that it needs to diversify its revenue streams.
“There is the military issue, but if there is no legal exemption, Big Hit is expected to either set up units with the remaining members or pursue solo acts while they serve in the military,” said Kim Hyun-yong.
($1 = 1,188.7900 won)
