MBW Explains is a sequence of analytical options wherein we discover the context behind main music business speaking factors – and recommend what would possibly occur subsequent. Solely MBW+ subscribers have limitless entry to those articles.
HYBE, the biggest Okay-pop firm on the earth, has made waves within the world music business since breaking BTS.
Its most notable transfer lately was the $1 billion-plus acquisition of Scooter Braun’s Ithaca Holdings in 2021.
Braun joined the board of HYBE and have become CEO of what’s now often called HYBE America. He stays a big shareholder within the firm, as you will note under.
Final yr, HYBE expanded into the rapidly-growing Latin music market with its acquisition of Exile Music, which fashioned the muse of the brand new HYBE Latin America.
Most lately, as a part of its new HYBE 2.0 technique, HYBE launched a label companies enterprise within the US and a brand new division known as HYBE MUSIC GROUP APAC, which oversees the entire firm’s music label companies primarily based in Korea and Japan.
Clearly, HYBE is aiming to be a significant world participant within the music area – and, arguably, it’s getting there.
As of final depend, HYBE had a market capitalization of KRW 7.16 trillion (USD $5.37 billion) – not precisely on the dimensions of Common Music Group, however not half unhealthy for a corporation fashioned simply 19 years in the past (identified again then as Huge Hit Leisure).
The corporate’s income for 2023 got here in at USD$1.66 billion, with 64% of that coming from exterior its house market of South Korea.
Regardless of its steadiness sheet successes, HYBE’s inventory value has taken a success in 2024; it was down 31.68% year-to-date, as of market shut on September 9.
That decline might be largely attributed to a basic trigger – this hasn’t been an important yr for leisure firm shares – and to a extra particular trigger: The battle between HYBE and Min Hee-jin, the now-former CEO of HYBE-owned ADOR, the label behind woman group NewJeans.
HYBE oustedMin from her position at ADOR in August, after months of acrimony between the label and the manager.
The corporate accused Min of engineering a plot to grab management of ADOR. Min has denied the allegations.
(Following her ouster, HYBE supplied Min a contract to remain on as NewJeans’ producer, however she declined.)
All this has put downward stress on HYBE’s share value, amid questions on how effectively HYBE’s multi-label construction – the primary of its form in South Korea’s burgeoning music business – is figuring out.
One music business skilled prompt that HYBE’s concentrate on “competitors” quite than “synergy” between labels could also be on the coronary heart of the issue.
That appears to ring true: Min’s preliminary gripe towards HYBE was reportedly that woman group ILLIT, developed by one other HYBE label, Belift Lab, was copying NewJeans.
Nonetheless, HYBE continues to be a multi-billion-dollar firm.
But who, precisely, is reaping the advantages from its progress story?
MBW has dug via DART – South Korea’s repository of regulatory filings – and mixed that with information from numerous analysis reviews to color an image of HYBE’s possession construction right now.
Lengthy story quick: HYBE’s largest particular person shareholders are its founder… and an organization managed by his brother.
Not surprisingly, HYBE’s largest shareholder is Bang Si-hyuk, the corporate’s founder who stepped down as CEO in 2021, however stays HYBE’s Chairman.
Bang turned a billionaire when he took HYBE public in October 2020, and the information exhibits he has retained that standing.
In response to HYBE’s most up-to-date semi-annual report filed with DART, as of June 30, 2024, Bang held 13.15 million of HYBE’s 41.65 million widespread shares, or 31.57% of the whole.
At HYBE’s market value at shut on September 9, that slice of the corporate was value KRW 2.170 trillion (USD$1.619 billion).
Bang Jun-hyuk and Netmarble Company
It’s not unusual for South Korea’s chaebol – aka big firms – to maintain possession throughout the household, and whereas HYBE could not totally qualify as a chaebol (it’s not precisely Samsung or LG), its possession construction does have an echo of that South Korean custom.
HYBE’s second largest shareholder is Netmarble Company, a online game developer based in 2000 by Bang Jun-hyuk – Bang Si-hyuk’s brother.
In response to HYBE’s semi-annual report, Netmarble owned 3.93 million shares of HYBE as of June 30, giving it a 9.44% share of the corporate. As of September 9, that stake in HYBE was value $483.8 million.
Netmarble’s stake in HYBE seems to have been diluted within the Okay-pop firm’s IPO. In response to information reviews out of South Korea, Netmarble initially took a 25.71% stake in HYBE again in 2018, two years earlier than the IPO.
And Netmarble’s relationship with HYBE is greater than fiscal: It has developed content material in partnership with HYBE, together with BTS World, a sport that includes the members of the Okay-pop group.
In response to Netmarble’s disclosures, as of the tip of 2023, Bang Jun-hyuk owned 24.12% of Netmarble, successfully giving him management of an extra 2.27% of HYBE.
Nationwide Pension Service
The third-largest shareholder in HYBE is the funding arm of South Korea’s Nationwide Pension Service, the nation’s public retirement pension fund.
That is no small fund: It’s the world’s third-largest public pension fund, with some $850 billion in belongings beneath administration.
It holds 2.65 million shares of HYBE, or 6.36%, value $325.9 million finally depend.
Dunamu Co. Ltd.
HYBE’s fourth-largest shareholder is Dunamu Co., a fintech firm that focuses on blockchain asset buying and selling. It operates the cryptocurrency alternate Upbit, a number one crypto alternate in South Korea.
It was based by Music Chi-hyung, who Forbes estimates is value $950 million.
As of June 20, Dunamu held 2.30 million shares of HYBE, or 5.53% of the whole, valued at $283.4 million as of September 9.
Credit score: Huge Hit
BTS
There’s little doubt that BTS – the boy band comprised of Jin, Suga, J-Hope, RM, Jimin, V, and Jungkook, are the musical phenomenon that propelled HYBE into its place as the most important Okay-pop company on the earth, and the group’s seven members have been rewarded for that with appreciable holdings of HYBE inventory.
In response to analysis from Korea CXO Analysis Institute, launched in late 2023 and reported on in Korean media, the seven members of BTS have been every given 68,385 shares of the corporate after they renewed their contracts in 2018.
Primarily based on the excellent quantity of shares as of June 30, that may give every of them about 0.16% of the corporate; nonetheless, a few of them seem to have bought some a part of that stake.
In response to the Korea CXO Analysis Institute’s information, as of early 2023, three BTS members had lowered their stakes: J-Hope owned 62,784 shares as of that point, whereas RM and Jin held barely smaller stakes than that.
Nevertheless, the BTS members’ preliminary share of HYBE’s was bigger again in 2018 than it’s now, on condition that they have been granted these shares earlier than HYBE’s 2020 IPO.
On the inventory value on the finish of the buying and selling day on September 9, a holding of 68,385 shares would have been value round $8.42 million.
In all, the seven BTS members have been granted some 478,695 shares of HYBE, or round 1.15% of the whole excellent shares as of June 30.
Scooter Braun
As CEO of HYBE America, Scooter Braun owns a substantial chunk of HYBE: based on HYBE’s semi-annual report, Braun held 362,292 shares of HYBE as of June 30, or round 0.87% of the whole.
As of the September 9 inventory value, that stake would have been value about $44.6 million.
Different shareholders
HYBE’s mid-year disclosures additionally listed various shareholders who’re executives both on the firm or at its associates, and who’re listed as proudly owning comparatively small stakes within the firm.
Notable amongst them is the above-mentioned Min Hee-jin. As of June 30, the previous ADOR CEO (pictured inset) held 2,700 shares of HYBE, or 0.01% of the whole, per HYBE’s DART submitting.
HYBE’s regulatory submitting additionally lists Lee Da Hye as a shareholder, with 2,161 shares.
Da Hye is CEO of Pledis Leisure, one other label inside HYBE’s multi-label system. HYBE took a majority stake in Pledis in 2020. Da Hye works alongside Sung Soo Han, Pledis Leisure’s founder and ‘Grasp Skilled’. Da Hye’s holdings quantity to 0.0005% of all excellent shares.
In response to HYBE’s regulatory submitting, it owned a 90% stake in Pledis as of June 30.
Additionally listed as a shareholder is Lee Ga-jun, the Head of Operations at Belift Lab, a label began as a three way partnership between HYBE and CJ ENM in 2018, and totally acquired by HYBE in 2023. Belift is finest identified for being the label behind Okay-pop stars ENHYPEN. In response to HYBE’s regulatory submitting, it owned 100% of Beflift lab as of June 30.
Lee is listed as proudly owning 1,562 shares of HYBE, or 0.0004% of the whole.
Then there’s Shin Younger-jae, till lately the President of BIGHIT MUSIC, the HYBE label whose title your complete firm wore, till its rebranding as HYBE in 2021. As a part of a reorg earlier this yr, Shin was appointed President of HYBE MUSIC GROUP APAC.
In response to HYBE’s semi-annual report, Shin held 1,302 shares of HYBE as of June 30, or 0.0003% of the whole.
One other notable listed shareholder is Joon Choi, CEO of HYBE-owned Weverse, the fan platform that kinds a key a part of the Okay-pop big’s technique to monetize superfans.
Weverse has seen important progress in customers over the previous a number of years, making the app a closely-watched phenomenon within the music business. Some are doing greater than watching; Common Music Groupinvested in Weverse earlier this yr, as a part of a 10-year unique distribution deal between UMG and HYBE.
As of June 30, Joon held simply 60 shares in HYBE.
HYBE held a 55.4% stake in Weverse as of June 30, based on its regulatory submitting.
The corporate confirms in its regulatory submitting that the quantity it spent to accumulate the 55.4% stake in Weverse was 164.4 billion KRW ($122m at right now’s alternate price).
In response to HYBE, the remaining shares of Weverse are owned by Korean tech and software program firm Naver and “different shareholders”.
Sources inform MBW that UMG made a minority funding in Weverse as a part of its partnership with HYBE, as introduced in March.
In 2021, Naverinvested roughly 354.8 billion received (roughly $321.6m) in HYBE subsidiary beNX – the HYBE subsidiary that developed Weverse. BeNX then acquired Naver’s V LIVE division.
On the time, the board of HYBE, then often called Huge Hit Leisure, voted to alter the title of beNX to WEVERSE COMPANY Inc.
The customers, content material and companies of Weverse and V LIVE have been then built-in to create a single world fan neighborhood platform.Music Enterprise Worldwide
