Music agency Big Hit Entertainment, home of K-pop phenomenon BTS, went public Thursday in a much anticipated initial public offering on South Korea's benchmark index.
The company raised nearly 963 billion won ($840 million), making it the largest public offering to hit South Korea markets since Celltrion Healthcare's $900 million initial public offering in 2017.
Big Hit stock peaked at 351,000 won ($307) after the opening bell before stabilizing at 278,000 won - 3% higher than the opening price.
"The glory didn't last long," said Korea equities analyst and SmartKarma contributor Sanghyun Park on Thursday.
Still, the gains put Big Hit's stock price at more than eight times higher than competitors like YG, SM and YPG.
Revenue at the agency nearly doubled last year to $500 million - driven predominantly by the performance of seven-member boy band BTS who have millions of listeners around the world.
These fans - who call themselves ARMY - helped propel the listing to more than 600 times oversubscribed by retail investors who had to be content with 5% of the float as per market guidelines.
The offering was underwritten by JP Morgan, Korea Investment & Securities and NH Investment & Securities. Mirae Asset Daewoo was a joint underwriter.
BTS Brings Big Business, Big Risk
Big Hit Entertainment's listing comes as the world appetite for South Korean pop music, or K-pop, reaches new proportions.
BTS brings around $3.6 billion into the South Korean economy every year, according to the Hyundai Research Institute. It said more than 70% of tourists to the country are fans.
The Hyundai Institute researchers estimate BTS will create more than $37 billion in economic value in the next 10 years.
While Big Hit has a roster of artists, BTS is seen as the driving force behind the label's success thanks to the worldwide following it has amassed since forming in 2010.
Agency founder and chairperson Bang Si-hyuk gave each of the seven stars 68,385 shares before the listing. These are valued at more than $16 million for each band member.
But the agency's reliance on BTS is a risk. And given that the members still must complete their roughly two years of required military service, this income stream might be halted.
Big Hit is so dependent on the band, the continued deferment of oldest member Jin's military service was said to be a liability in regulatory filings preceding the listing.
