[ad_1]
South Korean game publisher Com2uS has acquired a 4.2% stake in South Korean pop music company SM Entertainment for an undisclosed amount after acquiring 990,000 shares in two weeks.
development is report Com2uS’s press release was cited by several news outlets in South Korea.
Com2uS reportedly did not disclose how much it paid for the shares, but korea economic daily The reported value of the acquired shares was 67 billion won ($47 million).
Com2uS, which reportedly bought the shares between Oct. 12 and Oct. 31, said in a press release cited by South Korean news outlets that it believed SM Entertainment’s Stocks are undervalued and the company “There is a lot of growth potential going forward.”
Founded in 1995, SM Entertainment has become one of the largest K-Pop agencies in Korea. Its lineup includes big names such as SUPER JUNIOR, Girls’ Generation, SHINee, EXO, Red Velvet, KANGTA, BoA, TVXQ, NCT, and aespa.
The market value of the company is approximately 1.57 trillion won. In comparison, HYBE, the parent company of BTS’ management team BIGHIT MUSIC, has a market cap of 5.15 trillion wonwhile TWICE’s management, JYP Entertainment, is valued at 1.96 trillion won.
But amid a volatile trading environment, shares of SM Entertainment have fallen more than 10% so far this year as of Wednesday (Nov. 2).
As of Tuesday (Nov. 1), the company’s shares were down 22% from their April 1 peak. 85,900 won.
“SM Entertainment is one of the best entertainment companies to promote the popularity of Korean pop culture globally,” Com2uS lead As mentioned Korea Joongang Daily.
“It sold the foundation with 700 billion won in revenue and 130 billion won in net profit in 2021 and has the most diverse artist portfolio among K-pop agencies,” the company added.
According to reports, Com2uS has reportedly increased its stake in SM Entertainment to support SM Entertainment founder Lee Soo-man ahead of its next shareholder meeting scheduled for March 2023, as minority shareholders are pushing for his resignation as chief producer. job title.
October 14, SM Entertainment sever ties The partnership with Like Planning, a private company wholly owned by Lee, comes amid investor concerns that the company is paying tens of billions of won annually to Lee’s firm.
The company noted at the time that SM Entertainment paid Like Planning 24 billion won in 2021, accounting for 3.42% of the company’s sales in its most recent fiscal year.
Lee is SM Entertainment’s largest shareholder with an 18.5% stake. The contract with Like Planning was due to expire at the end of the year, but on October 14, the company’s board of directors voted to terminate the contract. take over “Intentional early termination of the production contract” in September.
At that time, SM Entertainment stated to shareholders, “The production system that Lee has established for 25 years is running well, and he believes that excellent junior producers will operate without difficulty. He added that he humbly accepts the opinions of minority shareholders and resigns (as president) Producer) is also reasonable.” korea times report.
Some analysts expect the termination of the Like Planning contract to be good for SM Entertainment.
“When the contract with Like Planning ends, SM Entertainment’s profit structure may improve … This will not only improve the company’s performance, but also have a positive impact on the stock price,” said Choi Min-ha, a researcher at Samsung Securities. korea times As said in September.
Meanwhile, Com2uS denied being Lee’s “white knight”.
“The investment is made from a neutral standpoint, judging that SM’s current share price is more likely to rise in the future,” said South Korea’s AJU Business Daily quote A Com2uS official said on condition of anonymity.
From a business perspective, Com2uS’ investment in SM Entertainment will support the game publisher’s metaverse efforts, as the entertainment agency has an extensive intellectual property portfolio.
SM Entertainment in July roll out A Metaverse content production technology company called Studio Kwangya has partnered with AmazeVR, a virtual reality concert platform based in Los Angeles.
Global Music Business
[ad_2]
Source link
