Issues such as power struggle within the company, BTS’s Suga’s drunk driving accident, and personal issues involving HYBE’s management had caused the stock to plummet, but it has since recovered temporarily.
However, the situation collapsed again when NewJeans publicly expressed its dissatisfaction with HYBE, weakening investor confidence.
On September 13, HYBE shares fell 2.96%, continuing a downward trend that began after NewJeans asked ADOR management to return to its original situation under Min Hee-jin by September 25.
The conflict between HYBE and Min, which began in April, appeared to have been resolved with the latter’s removal as CEO in August, but NewJeans’ comments reignited uncertainty, sending shares down.
This was further exacerbated by Min Hee-jin’s lawsuit to reinstate herself to ADOR, escalating the controversy. Despite K-pop’s global popularity, HYBE and other entertainment stocks have struggled this year, with HYBE stock falling 29.6% and similar declines seen for JYP, SM, and YG. The poor performance has been linked to lower earnings, with profits falling despite strong album sales.
Critics say K-pop’s revenue model, which relies heavily on album sales and fan-driven purchases of physical products, has its limitations. Album sales have slowed this year, contributing to weaker financial results for major entertainment companies. However, analysts suggest that stock prices could recover in late 2024 due to potential catalysts such as new artist debuts and increased monetization of HYBE’s fan platform Weverse.
Source: Daum
