South Korean mega-label Big Hit Entertainment are moving to an IPO with potential valuations of up to $5 billion for the BTS birthing company.
If you don’t know BTS then welcome out from the rock you’ve been hiding under! The South Korean boy band has taken the world by storm and have created a Beatles rivalling level of excitement in their fandom around the world.
The band are part of South Korea’s massive pop music culture which has become a major international export for the country. Big Hit Entertainment are a record label responsible for BTS and have found success with the booming pop music industry of South Korea.
Big Hit Entertainment are looking at an Independent Public Offering with stock firms reportedly valuing the label at up to $5 billion. A source speaking to Variety told them: “We see a fair chance that Big Hit will go for an IPO at a valuation set between $2.5 billion and $3.3 billion.”
They continue: “The label’s performance in 2019, the popularity of BTS, and the price-earning ratio of local entertainment companies listed in the Korean stock market have been taken into account [to come up with the valuation]. The IPO will draw a lot of interest from both local and international investors, as the K-pop industry is currently at its best days and BTS is enjoying unprecedented success.”
According to the Financial Times, the company have chosen JPMorgan, NH Investment & Securities, and Korea Investment & Securities as the underwriters for their IPO.
Big Hit Entertainment’s revenue doubled to a total of $494.6 million last year. If their growth is represented by the popularity of BTS alone then they are going to see even more incredible growth this year.
Whilst Big Hit plan to launch their IPO this year, they may be slowed down by Coronavirus. As BTS, their greatest asset, is such an international export it could have a major impact on their profits if the K-pop stars are limited in their travel.