Issues like the power struggle within the company, BTS’s Suga’s DUI incident and personal matters involving HYBE’s leadership had caused the stock to fall, but it temporarily recovered.
However, it slumped again when NewJeans publicly expressed their dissatisfaction with HYBE, weakening investor confidence.
On September 13th, HYBE’s stock fell by 2.96%, continuing a downward trend that began after NewJeans called for ADOR’s management to return to its original state under Min Hee-jin by September 25th.
The conflict between HYBE and Min, which began in April, seemed to settle with her removal as CEO in August, but NewJeans’ statements reignited uncertainty, leading to the stock decline.
This was further compounded by Min Hee-jin’s legal action to reinstate herself at ADOR, intensifying the dispute. Despite the global popularity of K-pop, HYBE and other entertainment stocks have struggled this year, with HYBE’s stock falling 29.6% and similar declines seen for JYP, SM and YG. The poor performance has been linked to lower earnings, with reduced profits despite high album sales.
Critics argue that K-pop’s revenue model, which heavily relies 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 might rebound in late 2024 due to potential catalysts like new artist debuts and increased monetization of HYBE’s fan platform Weverse.
Source: Daum
