Shares of HYBE fell 27.5% in early trading Wednesday morning following Tuesday’s news the Korean company’s cornerstone act, K-pop superstars BTS, will take time off for its seven members to pursue individual opportunities.
HYBE shares opened at KRW 168,000 on Wednesday after closed at KRW 193,000 on Tuesday. Within the first hour of trading, HYBE fell as far as KRW140,000, knocking off about $1.7 billion of market capitalization, before rebounding to KRW 145,500. In just one hour, HYBE investors exchanged more than six times the stock’s daily trading average on the Korean Stock Exchange.
Wednesday’s selloff put HYBE’s share price down 59.9% year to date. HYBE wasn’t the only music stock to fall sharply in 2022, however. Record labels and music publishers have not been immune to recent stock market volatility. Through Tuesday, Universal Music Group and Warner Music Group are down 16.7% and 36.5% year to date, respectively. Two smaller music companies, Believe and Reservoir Media, are down 51.5% and 23.9%, respectively, through Tuesday.
Companywide, BTS accounted for 27% of HYBE’s U.S. album sales and streams in 2021, according to the company’s fourth quarter 2021 investor presentation. In Japan — the world’s second-biggest music market — BTS accounted for about half of HYBE’s album sales, according to the company’s 2021 earnings. On top of that, BTS likely accounted for nearly all HYBE’s touring income that amounted to 191.1 billion ($148 million) in 2019 and 45.6 billion KRW ($36 million) 2021.
BTS ranked fourth on Billboard Boxscore’s mid-year 2022 list of top tours after selling 458,000 tickets for 11 concerts. Nearly 200,000 of those tickets came from just four shows at Allegient Stadium in Las Vegas. BTS’s four-night stand at SoFi Stadium in Los Angeles last December sold 200,000 tickets and grossed $33.3 million, according to Billboard Box Score — the sixth-highest grossing engagement in Boxscore history.
HYBE’s 2021 acquisition of Ithaca Holdings from Scooter Braun made the company less reliant on BTS to drive revenue. In terms of U.S. music sales and streams, Ithaca Holdings — which includes label and management clients — made up 45% of HYBE’s U.S. album sales in 2021. Big Machine Label Group, led by Thomas Rhett and Florida Georgia Line, accounted for 4.8 million album-equivalent units. Artists managed by SB Projects accounted for 7.5 million album equivalent units in 2021.
HYBE’s Korean artist roster has also become more diversified in recent years. In 2018, BTS accounted for 100% of the company’s U.S. album sales for its Korean artists. In 2019, 2020 and 2021, BTS’ share declined to 78.5%, 70.3% and 49.0%, respectively, as Seventeen, Tomorrow X Together and Enhyphen gained popularity.
This story will update as Wednesday trading continues.
