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HYBE becomes top shareholder in rival SM Entertainment

K-pop stocks have soared after HYBE (BTS, NewJeans) became the top shareholder in its biggest rival SM Entertainment

By Lisa Henderson on 10 Feb 2023

HYBE is home to K-pop superstars BTS

HYBE is home to K-pop superstars BTS

K-pop behemoth HYBE has become the largest shareholder in SM Entertainment, the rival South Korean company thought to have kickstarted the wave of popularity around Korean pop culture.

The purchase of KRW 422.8 billion shares — a 14.8% stake — was reported today (10 February) and helps strengthen HYBE’s position as a leader in K-pop. Reportedly, the company pledged in a separate notice to buy another 25% stake.

Through its subsidiary labels, such as Big Hit Music, Pledis Entertainment, Source Music and ADOR, HYBE is home to K-pop acts including BTS, Tomorrow X Together, NewJeans, LE SSERAFIM and Seventeen.

The SM move was led by HYBE’s global team, which includes chairman Bang Si-Hyuk, CEO Park Jiwon and Braun and involves acquiring former chief producer Lee Soo-Man’s shares in SM Entertainment. In October 2022, SM announced that it terminated a contract with Lee Soo-Man a year early.

Seoul-headquartered SM is home to such acts as aespa, BoA, TVXQ, Girls Generation, Shinee, EXO, Super Junior and NCT 127.

The deal is targeted at “raising its competitiveness in the K-pop industry and producing a synergy effect,” Hybe said in its filing.

Shares of SM Entertainment today soared, rising more than 16% at the open in Seoul, while HYBE rose 6%

Shares of SM Entertainment today soared, rising more than 16% at the open in Seoul, while HYBE rose 6%, JYP Entertainment rose 2.5% and YG Entertainment gained 3.8%.

Today’s blockbuster announcement comes at the end of a busy week of business for both HYBE and SM.

On Tuesday (7 February), SM Entertainment sold KRW 217.2 billion ($172.8m) shares – 9.05% stake – to South Korean internet company Kakao Corp.

The following day (8 February), HYBE America announced it had acquired Quality Control (QC Media Holdings, Inc.).

The Atlanta-based entertainment company covers music (Lil Baby, Lil Yachty, City Girls and Migos are among its signings), sports, film and television founded in 2013 by CEO Pierre “P” Thomas and COO Kevin “Coach K” Lee. The deal, valued at $320 million in stock and cash, was led by HYBE America CEO Scooter Braun.

The rise and rise of K-pop will be discussed at the forthcoming International Live Music Conference (ILMC), taking place at the Royal Lancaster Hotel in London, between 28 February to 3 March.


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