K-pop band BTS becomes a multi-millionaire with the label’s IPO

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SEOUL – Members of the hugely popular South Korean K-pop band bts They are expected to become multi-millionaire shareholders after receiving stakes in their Big Hit Entertainment label as it prepares initial public offering (IPO), which could raise up to 962.6 billion won ($811 million).

This week, BTS scored Korea’s first-ever #1 spot on the main US billboard music Charts with the hot disco hit “Dynamite”. Her first English-only single struck a chord with mainstream US pop fans, with a YouTube video that has already racked up more than 284 million views.

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CEO and largest shareholder of Big Hit Bang Si-hyuk Last month, Big Hit gave up 478,695 common shares to the seven BTS members, or 68,385 common shares 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 receive 9.23 billion won in shares, or 64.6 billion won in total, if the IPO is at the top of its range in October.

the floor Gift could be interpreted as an attempt to bond BTS members and the label more closely together, said Kim Hyun-yong, an analyst at eBEST Investment & Securities.

Big Hit plans to offer approximately 7.1 million shares at a target price range of 105,000 to 135,000 won per share.

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The pricing may value the company at as much as 4.8 trillion won ($4.04 billion) after accounting for convertible preferred stock and common stock, analysts said.

“The stock could do well on listing as there is plenty of liquidity market now…Then it depends on Big Hit results, but the lack of physical concerts due to COVID-19 will likely have a negative impact,” said Nam Hyo-ji, an analyst at KTB Investment and Securities.

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Big Hit relies heavily on BTS, with about 87.7% and 97.4% of its earnings coming from the group in the first half of 2020 and 2019, respectively, the filing said.

With BTS members expected to enter compulsory military service for South Korean men in the years to come, the label has been working to address market concerns that it needs to diversify its revenue streams.

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“There is the military issue, but unless there is a legal exception, Big Hit is expected to either form units with the remaining members or pursue solo performances while serving in the military,” Kim Hyun-yong said.

($1 = 1,188.7900 won)

(Reporting by Joyce Lee and Heekyong Yang; Editing by Kim Coghill)

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