HYBE Shares Jump 4% as BTS Agency Rebounds Above 160,000 Won After Months-Long Slide From Yearly Highs

SEOUL, South Korea — Shares of HYBE, the entertainment company behind K-pop supergroup BTS, rose more than 4% on Tuesday, climbing back above the 160,000-won mark after a prolonged decline that has erased more than half of the stock's value over the past year.

HYBE shares were trading at 162,800 won as of 3:19 p.m. in Seoul, up 6,300 won, or 4.03%, on the Korea Exchange. The stock had closed Monday at 156,500 won.

The shares opened at 153,000 won, which was also the session's low, before climbing steadily through the day. At the current price, the company's market value stands at roughly 7 trillion won, or about $4.9 billion.

No clear catalyst

The rally came without a major announcement from the company. Local market reports said no clear driver for the gain had been identified, and attributed the buying to the stock's relatively low price after months of losses.

HYBE recently filed a disclosure related to changes in its board, involving the appointment, dismissal or early departure of an independent director. Market analysts said it was difficult to conclude that the filing directly contributed to Tuesday's gains.

Analysts cautioned that short-term profit-taking could follow the rebound, and said whether the stock can hold above 160,000 won would be a key test in coming sessions.

A steep decline

Even with Tuesday's gain, HYBE shares remain far below their peak. The stock's 52-week high is 405,500 won, meaning the shares are still down roughly 60% from that level.

The decline has been driven by several factors, including concerns that the boost from BTS' return may have already peaked, falling album sales across the K-pop industry and investor flows in the South Korean market that have concentrated on semiconductors and large-cap stocks rather than entertainment shares.

The slide has also hit the wealth of HYBE founder and Chairman Bang Si-hyuk, whose stake lost more than 1 trillion won in value over a short period, according to a corporate research institute that tracks the holdings of major business leaders.

BTS comeback falls short of expectations

HYBE's shares rose sharply earlier this year as BTS prepared to return as a full group following mandatory military service. The band's members had been on an extended hiatus since 2022, a period during which HYBE's profit slumped.

But the comeback did not deliver the stock market reaction investors had hoped for. HYBE shares fell 15% on March 23 after the band's comeback concert in Seoul drew a smaller crowd than expected. Local authorities said just over 100,000 fans attended the free show at Gwanghwamun Square, well short of the 260,000 forecast.

Strict crowd control measures and a global livestream on Netflix were cited as factors in the lower turnout.

Other measures of the comeback were strong. The band's new album, "Arirang," sold 3.98 million copies on its first day of release. BTS is scheduled to perform 79 shows across 23 countries in the first leg of its world tour.

Record results, falling shares

The tour helped HYBE post its strongest quarter on record. On July 28, the company reported second-quarter revenue of 1.45 trillion won and operating profit of 170.9 billion won, both all-time quarterly highs.

Despite the record figures, which beat analysts' consensus estimates, HYBE shares fell 16.09% to 188,800 won the following day. It was the stock's worst single-day performance since June 2022. The shares fell as much as 16.31% the next day, and as much as 2.845 trillion won was wiped from the company's market value in less than 24 hours.

Analysts said the sell-off reflected concerns about profitability. Concert revenue from established acts such as BTS carries lower margins than merchandise and other businesses, and the higher share of concert sales increased cost pressures. Investors had expected growth to be led by higher-margin merchandise sales.

Legal overhang

HYBE has also faced uncertainty related to its founder. Bang has been questioned by police over allegations that he deceived investors into selling their shares before HYBE's initial public offering. HYBE has denied the allegations.

Bang is HYBE's largest shareholder, holding about 28.4% of the company. Other major shareholders include game developer Netmarble and South Korea's National Pension Service.

Diversification efforts

HYBE, founded in 2005 as Big Hit Entertainment, became the dominant force in K-pop on the back of BTS' global success. The company went public in October 2020.

In recent years, HYBE has expanded into a multi-label structure and built Weverse, a fan community platform, in an effort to reduce its dependence on a single act. Its roster includes groups such as Seventeen, Enhypen and Le Sserafim, as well as global girl group Katseye.

Investors have focused on whether the company can generate more revenue from Weverse and its non-BTS acts as a way to sustain earnings growth beyond the band's touring cycle.

Market watchers will be looking at whether Tuesday's rebound can be sustained, as well as the company's upcoming third-quarter results, which will reflect a full quarter of BTS tour revenue.

Investors are also likely to monitor developments in the investigation involving Bang, broader trends in K-pop album sales and the flow of capital in the South Korean stock market between technology and entertainment shares.

The Korea Exchange closes at 3:30 p.m. local time.