Big Hit pulls in over 58 trillion won during public subscription

Big Hit Entertainment, a label behind South Korean boy band BTS, has raised more than 58 trillion won in subscription for retail investors prior to the IPO next month. It has become the second-highest subscription replacing SK Biopharmaceuticals just in three months, although it fell short of surpassing the highest record set by Kakao Games.

According to the securities industry on Tuesday, Big Hit Entertainment pulled in 58.42 trillion won during the two-day subscription. The shares were oversubscribed by 607 times, which translates into 100 million won in deposit for two shares.

The management company raised 8.624 trillion won on the first day, less than expected, which has been attributed to the high price at 135,000 won per share. On the second day, however, investors who were examining the situation on the first day scrambled to subscribe, pushing up the total deposit. Some funds are thought to have come from Kakao Games.

The appropriate share price suggested by the securities industry ranges between 160,000 and 380,000 won. Some expect an increase in its share price, citing the growth potential of BTS and other groups, the scalability of “Weverse,” a fan community platform of Big Hit Entertainment, and the possibility of the company making it to KOSPI 200. Heavy reliance on BTS, on the other hand, is seen as a risk. Also, the ratio of Big Hit’s lock-up agreement, which prevents institutional investors from selling their shares for a specified period of time, is only 43.9%, meaning there could be heavy dumping.


Yoo-Hyun Kang yhkang@donga.com