Shares of Hybe Corporation, the managing agency for South Korean boy band BTS, plunged below the price of their initial public offering for the first time, extending a downturn that has erased roughly $10 billion from their peak.
What Happened: On Wednesday, Hybe traded as low as 129,000 won, down from its IPO price of 135,000 won, a 7.9% decline, according to a report by Bloomberg.
The stock has been on the decline, since the Korean pop or K-pop group announced in June that they will concentrate on solo projects for a while, with dangers increased by the members’ impending deadlines for military service.
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Hybe's market value decreased by $1.7 billion as a result of its shares falling up to 28% after the band members’ announcement in June. This year, the stock has dropped by almost 60%, drastically underperforming South Korea’s benchmark index.
Why It’s Important: BTS is one of the most popular bands in the world. It has 70.8 million YouTube subscribers and 47.4 million followers on Twitter (NYSE:TWTR).
According to the Bloomberg report, investors are concerned about Hybe’s excessive reliance on BTS and what would happen if the band members were required to complete the mandatory military service, which lasts at least one-and-half years.
Every South Korean man over a particular age is required to serve in the military. The oldest member of the band, 29-year-old Jin, has until the end of the year to sign up for military service, reports Bloomberg.
The subject of the band members’ military service resurfaced as a major topic of discussion after the government floated the idea of an opinion poll in August. Though the proposal was scrapped, persistent rumors that BTS may be granted exemptions to continue performing have been causing wild price swings.
Price Action: At the time of writing, Hybe Corporation shares were trading 7.14% lower at 1,30,000 won in the regular session.
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