The market capitalization of a major Hallyu agency evaporated 850 billion won in two days…The fate of New Jeans Photos International News: AFPBB News

[April 24th KOREA WAVE]

The fate of the popular group “New Jeans” and the future of HYBE’s stock price in response to the move to “de-HYBE” by the entertainment agency “ADOR”, which is affiliated with South Korea’s major general entertainment company “HYBE” There is a growing interest in The prevailing view among securities industry insiders is that even if ADOR CEO Min Hee-jin leaves the company, NewJeans will remain with HYBE. Some believe that even if problems arise with NewJeans’ activities, it will not have a major impact on HYBE’s performance.

HYBE closed on the 23rd at 210,000 won (1 won = approximately 0.11 yen), 2,500 won (1.18%) lower than the previous day. HYBE’s stock price plunged 18,000 won (7.81%) from the previous trading day to close at 212,500 won due to the news that HYBE had exercised its “audit right against ADOR management.”

The stock price fell by 8.9% in two days due to information that some executives of ADOR, including CEO Min, were being audited in connection with “de-HYBE.” The market capitalization also decreased by 853.9 billion won in two days.

The HYBE audit team reportedly exercised its auditing rights after discovering that ADOR’s management had leaked a confidential contract and induced HYBE to sell its ADOR shares. HYBE also understands that Mr. A, an ADOR executive, used his position to pass HYBE internal information to ADOR.

HYBE has also requested the ADOR board to convene a general meeting of shareholders. HYBE sent a separate letter requesting the convening of a general meeting of shareholders and requesting CEO Min’s resignation.

There are also concerns that this “internal conflict” may have a negative impact on New Jeans, which is scheduled to make a comeback on May 24th. Some are concerned that if CEO Min resigns, NewJeans may also leave HYBE/ADOR.

However, the exclusive contract rights for NewJeans belong to HYBE, which holds an 80% stake. The exact length of the contract between NewJeans and HYBE, which debuted in 2022, is unknown. However, under the Fair Trade Commission’s Celebrity Standard Terms and Conditions, the typical exclusive contract period in the music industry is seven years from the date of debut.

There is still a lot of time left in the contract, and in order for Representative Min to leave HYBE with NewJeans, NewJeans would have to pay a huge penalty to HYBE, so the scenario of NewJeans leaving HYBE is not realistic. .

The prevailing opinion among those in the securities industry is that there will be no major impact on NewJeans’ comeback and activities in May.

Ahn Do-young, a researcher at Korea Investment & Securities, said, “Since HYBE owns 80% of ADOR, NewJeans will continue to be HYBE’s intellectual property (IP).Both parties cannot damage NewJeans’ IP. Because they do not want this to happen, it is unlikely that activities related to the album scheduled for release in May or June will be affected.”

Park Soo-young, a researcher at Hanwha Investment & Securities, said, “Although we won’t see a major impact on performance in the short term, we cannot avoid increasing stock price volatility as we assess the performance of “New Jeans without Min Hee-jin.” ” is expected.

(c)news1/KOREA WAVE/AFPBB News