Hit by the snowballing sex scandal surrounding an ex-member of boy band Big Bang, shares of major K-pop management agencies in South Korea have been wavering this week.
Share prices of the Kosdaq-listed YG Entertainment -- home to former Big Bang member Seungri -- ended 5.2 percent higher from the previous day at 37,750 won ($33.32) Wednesday. They had opened 0.7 percent higher and steadily rose throughout the day.
|Seungri, a member of popular boy group Big Bang, appears at the Seoul Metropolitan Police Agency on Feb 27. (Yonhap)|
The figure was a noteworthy rebound from the firm’s performance Tuesday, when it ended 3.36 percent lower at 35,900 won, extending Monday’s retreat. The shares had tumbled 14 percent by Monday’s close, marking the firm’s biggest drop since its initial public offering in 2011.
YG’s market value also plunged 133.7 billion won from Monday to Tuesday, to 652.9 billion won, as the scandal grew bigger with revelations that Seungri had been included in a KakaoTalk group chat where fellow K-pop star Jung Joon-young shared sex videos he had secretly filmed. Police launched a probe into the sex video allegations Monday.
Along with its stocks, the agency’s market value recovered slightly to 686.5 billion won during the same period, after YG terminated its contract with Seungri earlier in the day.
Industry colleague JYP Entertainment gained 0.17 percent to 30,000 won, while S.M. Entertainment closed 2.18 percent higher at 39,900 won per share. They had ended 4 percent and 3.7 percent lower, respectively, from the previous close Tuesday.
But mirroring YG, they slowly gained throughout Wednesday as pressure on their stocks lifted.
Analysts are noting dampening investor sentiment surrounding the K-pop stocks, with their performance excessively depending on the artists’ personal integrity and moral decisions.
S.M. also saw its market cap fall by 112.6 billion won in a single day in 2014, when a former Chinese member of its boy band EXO filed a lawsuit seeking to nullify his exclusive contract with the agency.
“Now, the fate of entertainment-related stocks rests on how agencies successfully perform in the overseas market -- as can be observed in the case of BTS,” said Park Sung-ho, an analyst at Yuanta Securities.
Park also highlighted the stocks of companies that seemed to have solid strategies either for entering foreign markets or maintaining their positions there.
Meanwhile, JYP Entertainment’s market value reached 1.62 trillion won as of Wednesday, buoyed by the popularity of girl group Twice and boy band GOT7. The company’s girl group ITZY, which recently debuted, has created a buzz in recent weeks as well.
By Jung Min-kyung (firstname.lastname@example.org)