HYBE in Crisis due to NewJeans: Stock Plummet, Bang Si-hyuk’s 400 Billion Won Risk
As of noon on November 29, HYBE’s stock was trading at 197,700 KRW (approx 141 USD), down 2.85% from the previous trading day. Shortly after the market opened, the stock had plunged 6.63% to 189,300 KRW (approx 135 USD) at one point during early trading.
The drop is attributed to the domestic stock market’s weak performance combined with NewJeans’ abrupt departure from HYBE. The group, considered HYBE’s next major revenue driver, held an emergency press conference on November 28, announcing that their contract with ADOR would be terminated as of midnight on November 29.
Adding to the turmoil, HYBE founder and chairman Bang Si-hyuk is under scrutiny for a financial controversy. A report surfaced alleging that Bang earned nearly 400 billion won (approx. 286.6 million USD) in investment profits during HYBE’s IPO 4 years ago through a private equity agreement.
The agreement, it was revealed, was not disclosed to the Korea Exchange during HYBE’s IPO review process nor included in the financial regulator’s securities filing.
In response, HYBE stated, “During the IPO preparation, the company provided the shareholder agreement to the IPO underwriters, who reviewed it in compliance with applicable laws. We believe there was no legal violation in the IPO process.”
This controversy has added another layer of challenges for HYBE as it navigates the fallout from NewJeans’ contract termination.
Source: Daum
