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HYBE Corporation is currently the largest player and leader in the K-pop industry. However, the multi-label organization saw a decline in its share value due to the ongoing disputes with ADOR CEO Min Hee-jin since April 2024. HYBE's public spat with ADOR has escalated and the company's shares witnessed an additional decline. Min Hee-jin's label falls under the HYBE multi-label structure and is an affiliate.
On May 23, 2024, netizens on the Korean forum Theqoo discussed that the corporation's stock price recently fell below KRW 190,000 ($139). It closed at KRW 190,000 (about $139) on May 21, then dropped even lower to KRW 187,000 (around $137) the second day. The price is the lowest-ever recorded value of the company's shares in 2024.
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ADOR and HYBE locked horns on April 21, 2024, after their internal management feud became public. According to the statement released on April 25, HYBE later referred Min, who holds an 18% share in ADOR, to the police for breach of trust and other allegations and requested that she resign. This issue increased HYBE's losses.
HYBE's ongoing battle with Min Hee-jin continues to create a volatile market for its market value
On April 22, HYBE's stock dropped 7.8%, and by the end of the week, it had lost 12.6% to KRW 201,500 ($146.22). Their stock price dropped by 25.4% in the last year and 13.7% in 2024. This resulted in a considerable decrease in the company's market value, which went from KRW 9.6 trillion ($7.14 billion) to KRW 8.8 trillion ($6.42 billion).
The parent corporation's assets purportedly surpassed KRW 5 trillion (about $3.67 billion) as of 2024. As a result, the company founded by Bang Si-hyuk became the first entertainment giant in Korea to turn into a conglomerate in May 2024. However, the multi-label company is exhibiting indications of a downturn as its stock prices continue to drop due to the ongoing feud.
Meanwhile, the steep drop in the stock price was initially brought on when the corporation audited the ADOR management. HYBE accused the ADOR CEO of trying to separate the affiliate from the parent company and filed a formal letter of inquiry. At present, HYBE owns 80% of Min Hee-jin's label while she owns 18% and the remaining management team owns 2%.
The feud accelerated as Min Hee-jin charged the parent corporation and Bang Si-hyuk for mistreating her and her girl group NewJeans. She later accused Bang Si-hyuk of alleged album sales inflation (sajaegi) and chart manipulation of his artists' releases. This further saw another dip in the share market as investors met with rising concerns.
Notably, the company's Q1 2024 report indicated a discernible fall in net profit in addition to the plummeting stock prices of the multi-label organization that is home to BTS. HYBE's net profit for Q1 2024 was 0.8% after taking into account losses incurred by its America subsidiary, Weverse, and its branch IM.
These subsidiaries' losses were over KRW 5 billion or around $3.67 million. Although other subsidiaries did show a positive net profit, BTS' absence caused a huge net loss for the corporation.
The Korea Herald reported that investment and market experts predict that the issue will not significantly affect Bang Si-hyuk's company performance. In addition, retail investors took advantage of the sale of equities by foreign and institutional investors, viewing it as a chance to get a deal. It is important to note that BTS has been absent since December 2023 due to their enlistment.
The Korea Herald reported that an analyst from NH Investment & Securities further estimated that ADOR's contribution in 2024 was 14%. The expert highlighted that after BTS resumes its activities next year, profits would increase since BTS is the biggest revenue generator of the company. Furthermore, due to BTS' absence, the company had already recorded a 72.6% loss in operating profit in the first quarter of 2024.
Meanwhile, the parent company (formerly BigHit Entertainment) had submitted evidence in court against Min Hee-jin and her intentions of crashing the parent company's share price by allegedly conspiring with Dunamu and Naver, taking over ADOR, and more. Notably, Dunamu is one of the biggest shareholders in the company and a member of the board of directors. The court battle had its first hearing on May 17. This court hearing was a result of the injunction filed by Min Hee-jin.
The injunction was filed to stop the parent company from using its voting rights as the largest shareholder of ADOR and remove Min Hee-jin from her position as the label's CEO. The Seoul Central District Court has stated that it will accept evidence from both parties till May 24, 2024.
