Big Hit Entertainment went through its first day of trade on Thursday. Though the label’s shares debuted twice the initial public offering price, it went through a slump in the next hours. Still interested in purchasing the entertainment agency’s shares?
Big Hit Entertainment shares debuted at a doubled price
Quoted from Reuters, Big Hit Entertainment shares price surged twice than its initial public offering. The entertainment label hit the peak at 270,000 won per share, for a 9.6 trillion won valuation. Unfortunately, the 30% shares surge in early trade was followed by a slow down by the next hours.
As of its first day of trade on Thursday, Big Hit Entertainment scored an 8.7 trillion won ($7.61 billion) market valuation. Big Hit Entertainment’s closing share at 258,00 won, which values 90% above the IPO price, is still a “reasonable price”, and is not a sign of a deeper dive into listing failure, analysts said. eBest Investment & Securities analyst, Jina An, added that the closing price still falls under “analysts’ average target price for 2022, based on estimations of profit increases”.
Refinitiv data revealed the listing pulls South Korea’s heightened IPO activity even higher. The company recorded a 51% incline to $2.9 billion compared to the same period last year.
Entertainment industry investment: measures to take
Investing in the entertainment-related industry is, as much as other investments are, risky. An entertainment label‘s stocks highly rely on the artists’ reputation and demand. Hence, a simple scratch in the celebrities’ reputation may take the label’s stock on a deep dive.
Upon this, Hyundai Motor Securities’ analyst Kim Hyun-Yong noted that “the industry is booming, but it’s also very cyclical, and undergoes a lot of fluctuation”.
However, Big Hit founder and co-CEO Bang Si Hyuk assured by adding that the company has “new value chains” plan in hand. “We will continue to research, challenge, discover innovative business models, and apply them to continue to grow in the global market,” he added.
Bang Si Hyuk’s statement isn’t a mere act. Big Hit Entertainment’s online savviness is apparent through the implementation of social media and available platforms. Recently, the entertainment label has just hosted an online concert for its main act, BTS. Through its Weverse app, the entertainment label eases global fans on purchasing online concert tickets and other merchandise.
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