"While BTS from the neighboring agency, HYBE (formerly Big Hit Music), renewed their contracts with two years left, we're left in the dark about our own group..." (Comment from YG Entertainment's stock discussion board)
Following the news of HYBE's renewal with BTS, various YG Entertainment stock discussion boards were filled with envious remarks. The successful contract renewal of HYBE with its flagship group, BTS, has deepened the concerns of YG Entertainment shareholders.
69,200 won - this was the stock price of YG Entertainment on September 21, plummeting by a staggering 13.28% just before the market closed.
Historically, YG Entertainment's stock had always maintained a range between the high 70,000 won to the early 80,000 won. However, on September 21, it dipped to as low as 68,700 won, trading at 69,200 won, a drop of 10,600 won from the previous day.
The stock had surged to 97,000 won in late May due to surprising first-quarter results, but recently, it struggles to even maintain the 80,000 won mark.
YG Entertainment's stock has been volatile with every update regarding BLACKPINK members' contract renewals. BLACKPINK's exclusive contract with YG Entertainment ended on the 7th of last month.
At the center of the 'complete renewal' speculation for BLACKPINK is Lisa. Concerns grew as Lisa's extended stay in Thailand was perceived as a sign of her refusal to renew. The stock dropped every time dating rumors surfaced.
Thai media reported on the 15th that Lisa was spotted in Bangkok with Frederic Arnault, the fourth son of LVMH chairman and CEO of luxury watch brand TAG Heuer. Rumors circulated that day suggesting Lisa had declined a contract offer from the company worth around 50 billion won. The stock dropped nearly 3% that day, with a momentary dip exceeding 10%.
On July 12th, multiple media outlets reported on Lisa's rumored relationship with the TAG Heuer CEO, causing the stock to drop 9.13% over three days. Reports also surfaced suggesting that among BLACKPINK members, Lisa's contract renewal remained uncertain, further driving the stock down.
A month has passed since the end of the exclusive contract, and with no news of a renewal and the company not issuing any official statement, investors are growing weary. Comments on stock discussion boards include: "HYBE is a feast while YG is just a photo album", "YG shows no consideration for its shareholders", "I sold everything because I'm anxious", and "I believe Lisa will definitely renew her contract".
Meanwhile, the securities industry advises not to focus solely on the BLACKPINK renewal issue.
Lee Hwa-jung, a researcher at KB Securities, stated, "While uncertainties regarding BLACKPINK's renewal persist, I believe the stock has mostly reflected this." She added, "Rather than relying solely on BLACKPINK, it's essential to focus on the growth momentum of other lineups." TREASURE has proven its growth by recording an impressive initial sales of 170,000 for their new album, and the soon-to-debut BABY MONSTER already has a strong fandom, promising quick profitability.
Choi Jong-kyung, a researcher at Heungkuk Securities, mentioned, "Considering BABY MONSTER is the comeback project of producer Yang Hyun-suk, we expect a genre different from the typical pop style of girl group debut songs. This could attract fans beyond the existing fourth-generation idol fandom." He added, "TREASURE is also expanding its global fandom with its current activities, so even during BLACKPINK's inactive period, the company's second-half profitability will be somewhat defended."
