Big Hit Entertainment stock went public: How BTS’s net worth changed
If we have to look at the number game, BTS has been hitting it out of the park lately. The music video for their song DNA hit 1.1 billion views on YouTube. Their music video for “Dynamite” has received over 450 million views. They trumped Taylor Swift’s biggest Spotify debut record of 7.7742 million streams for “Cardigan” by registering 7.778 million streams on the debut day of their latest single “Dynamite”.
For Big Hit Entertainment, the label that manages BTS, a majority of their revenue is attributable to BTS alone. Reportedly, BTS brought in more than 87% of the company’s revenue in the first half of 2020, and more than 97% in the same period last year. So now when Big Hit Entertainment decided to go public with an Initial Public Offering (IPO), they decided to share the wealth with the band members.
When news broke about the IPO & the label’s unprecedented decision to give them shares in the public offering, the number-crunching got more intense. The members of the South Korean K-pop band – RM, Jin, Suga, J-Hope, Jimin, V, and Jungkook – were reportedly set to receive around $7.7 million in around 68,385 common shares.
Let’s crunch those numbers
The IPO was made for 135,000 won, in line with the valuation of the label at over $4 billion. This has been the biggest South Korean market debut in over three years. Now when this listing goes public, the expectation was that each member of BTS walks away around $7.7 million richer, while the Big Hit Entertainment CEO bang Si-hyuk would enter the charts of billionaires.
The BTS members were expected to then come in ownership of around 35.5% of the label & 6.7% of the total shares. If their currency so far was in the form of streams, merch, and concerts, now the BTS ARMY was expected to be clamoring to buy shares in the label.
Moreover, in an industry notorious for its unfair contracts & maltreatment of artists, sharing the wealth with the artists comes across as an unprecedented, interpersonal decision. It makes business sense too since BTS have accounted for a whopping chunk of the label’s revenue.
How it started versus how it’s going
Setting their expectations in place, the company went public, but to everyone’s surprise, it opened at more than double the offering price. The initial value was 135,000 won at which it started trading. With the kind of demand, the stock jumped to twice that value, with the result that the company started trading at 270,000 won.
Throughout the day on October 15, 2020, the valuation increased, up to the maximum allowed 30%. The result? At the end of the first trading day, the stock valuation of Big Hit Entertainment stood at 258,000 won. Do simple math and we realize that this valuation registers over a 90% increase from the initial valuing. This also means that our favorite boy band members are now confirmed millionaires.
Meanwhile, the band keeps selling out. Almost a million tickets were sold for the MAP OF THE SOUL ON:E concert, each ticket starting at $45. At the same time, BTS’s Jungkook became the youngest Asian singer to bag the top spots at the Billboard Hot 100 chart with “Dynamite” & his “Savage Love Remix”.
At the Billboard Music Awards 2020, BTS took home their fourth consecutive win for the Best Social Artist. They also gave an enthralling performance at the awards ceremony, lighting up the stage like “Dynamite”.
The group gushed over their award during a post-show interview. “We did it,” RM stated. “We did top social artist for three years, but main category, first time [and] everyone’s freaking out. Thank you ARMY, you did it!”
While BTS is bringing revenue for Big Hit Entertainment, the company is also bound to become more business savvy, diversifying its client base, and so on.