Members of hugely popular South Korean K-Pop band BTS are expected to become multimillionaire shareholders after receiving shares in their record label, Big Hit Entertainment, as it prepares an initial public offering that could raise up to 962.6 billion won (Dh2.97 billion).
Big Hit Entertainment’s chief executive and largest shareholder Bang Si-hyuk last month gave 478,695 common shares to the seven BTS members, 68,385 each, to “strengthen long-term partnership with major artists and boost morale", the label said in a regulatory filing on Wednesday.
Each BTS member would get shares worth 9.23 billion won, or 64.6 billion won altogether, if the IPO is priced at the top of its range in October.
Big Hit plans to offer about 7.1 million shares at an indicative price range of 105,000-135,000 won per share.
The pricing potentially values the company at up to 4.8 trillion won , considering convertible preferred stocks plus common shares, analysts said.
"The stock could perform well upon listing, as there's a lot of liquidity in the market now... Then it depends on Big Hit's results, but the lack of physical concerts due to Covid-19 will likely have negative impact," said Nam Hyo-ji, analyst at KTB Investment and Securities.
Big Hit relies heavily on BTS, with about 87.7 per cent and 97.4 per cent of its revenue in the first half of 2020 and 2019 respectively coming from the group, the filing said.
With BTS members expected to enter mandatory military service for South Korean men in coming years, the label has worked to address market concerns that it needs to diversify its revenue streams.