As of midday on November 29, HYBE shares were trading at KRW 197,700 (about USD 141), down 2.85% from the previous trading day. Shortly after the market opened, at one point during early trading, the stock had fallen 6.63% to KRW 189,300 (around USD 135).
The decline is attributed to the weak performance of the domestic stock market combined with NewJeans’ sharp departure from HYBE. The group, seen as HYBE’s next major revenue driver, held an emergency press conference on November 28, announcing that their contract with ADOR would be terminated effective midnight on November 29.
Adding to the turmoil, HYBE founder and president Bang Si-hyuk is under scrutiny over a financial controversy. A report has emerged that Bang earned nearly 400 billion won (about $286.6 million) in investment profits during HYBE’s IPO 4 years ago through a private equity deal.
The deal, it was revealed, was not disclosed to the Korea Exchange during the review process of HYBE’s IPO, nor included in the financial regulator’s securities filing.
In response, HYBE stated: “During the preparation of the IPO, the company provided the shareholders’ agreement to the underwriters of the IPO, who reviewed it in accordance 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 deals with the fallout from NewJeans’ contract termination.
Source: Daum
