MBW Explains is a collection of analytical options through which we discover the context behind main music business speaking factors – and counsel what would possibly occur subsequent. Solely MBW+ subscribers have limitless entry to those articles.
HYBE, the most important Ok-pop firm on this planet, has made waves within the international music business since breaking BTS.
Its most notable transfer lately was the $1 billion-plus acquisition of Scooter Braun’s Ithaca Holdings in 2021.
Braun joined the board of HYBE and have become CEO of what’s now often called HYBE America. He stays a big shareholder within the firm, as you will note under.
Final 12 months, HYBE expanded into the rapidly-growing Latin music market with its acquisition of Exile Music, which shaped the muse of the brand new HYBE Latin America.
Most lately, as a part of its new HYBE 2.0 technique, HYBE launched a label providers enterprise within the US and a brand new division known as HYBE MUSIC GROUP APAC, which oversees the entire firm’s music label companies based mostly in Korea and Japan.
Clearly, HYBE is aiming to be a significant international participant within the music house – and, arguably, it’s getting there.
As of final rely, HYBE had a market capitalization of KRW 7.16 trillion (USD $5.37 billion) – not precisely on the size of Common Music Group, however not half unhealthy for a corporation shaped simply 19 years in the past (recognized again then as Large Hit Leisure).
The corporate’s income for 2023 got here in at USD$1.66 billion, with 64% of that coming from exterior its house market of South Korea.
Regardless of its stability sheet successes, HYBE’s inventory worth has taken a success in 2024; it was down 31.68% year-to-date, as of market shut on September 9.
That decline might be largely attributed to a common trigger – this hasn’t been a fantastic 12 months for leisure firm shares – and to a extra particular trigger: The battle between HYBE and Min Hee-jin, the now-former CEO of HYBE-owned ADOR, the label behind lady group NewJeans.
HYBE oustedMin from her function at ADOR in August, after months of acrimony between the label and the chief.
The corporate accused Min of engineering a plot to grab management of ADOR. Min has denied the allegations.
(Following her ouster, HYBE provided Min a contract to remain on as NewJeans’ producer, however she declined.)
All this has put downward strain on HYBE’s share worth, amid questions on how nicely HYBE’s multi-label construction – the primary of its type in South Korea’s burgeoning music business – is understanding.
One music business professional steered that HYBE’s concentrate on “competitors” reasonably than “synergy” between labels could also be on the coronary heart of the issue.
That appears to ring true: Min’s preliminary gripe in opposition to HYBE was reportedly that lady group ILLIT, developed by one other HYBE label, Belift Lab, was copying NewJeans.
Nonetheless, HYBE continues to be a multi-billion-dollar firm.
But who, precisely, is reaping the advantages from its progress story?
MBW has dug by DART – South Korea’s repository of regulatory filings – and mixed that with knowledge from varied analysis reviews to color an image of HYBE’s possession construction right this moment.
Lengthy story brief: HYBE’s largest particular person shareholders are its founder… and an organization managed by his brother.
Not surprisingly, HYBE’s largest shareholder is Bang Si-hyuk, the corporate’s founder who stepped down as CEO in 2021, however stays HYBE’s Chairman.
Bang turned a billionaire when he took HYBE public in October 2020, and the info reveals he has retained that standing.
In accordance with HYBE’s most up-to-date semi-annual report filed with DART, as of June 30, 2024, Bang held 13.15 million of HYBE’s 41.65 million widespread shares, or 31.57% of the overall.
At HYBE’s market worth at shut on September 9, that slice of the corporate was price KRW 2.170 trillion (USD$1.619 billion).
Bang Jun-hyuk and Netmarble Company
It’s not unusual for South Korea’s chaebol – aka big companies – to maintain possession inside the household, and whereas HYBE could not fully qualify as a chaebol (it’s not precisely Samsung or LG), its possession construction does have an echo of that South Korean custom.
HYBE’s second largest shareholder is Netmarble Company, a online game developer based in 2000 by Bang Jun-hyuk – Bang Si-hyuk’s brother.
In accordance with HYBE’s semi-annual report, Netmarble owned 3.93 million shares of HYBE as of June 30, giving it a 9.44% share of the corporate. As of September 9, that stake in HYBE was price $483.8 million.
Netmarble’s stake in HYBE seems to have been diluted within the Ok-pop firm’s IPO. In accordance with information reviews out of South Korea, Netmarble initially took a 25.71% stake in HYBE again in 2018, two years earlier than the IPO.
And Netmarble’s relationship with HYBE is greater than fiscal: It has developed content material in partnership with HYBE, together with BTS World, a recreation that includes the members of the Ok-pop group.
In accordance with Netmarble’s disclosures, as of the tip of 2023, Bang Jun-hyuk owned 24.12% of Netmarble, successfully giving him management of a further 2.27% of HYBE.
Nationwide Pension Service
The third-largest shareholder in HYBE is the funding arm of South Korea’s Nationwide Pension Service, the nation’s public retirement pension fund.
That is no small fund: It’s the world’s third-largest public pension fund, with some $850 billion in belongings below administration.
It holds 2.65 million shares of HYBE, or 6.36%, price $325.9 million ultimately rely.
Dunamu
Co. Ltd.
HYBE’s fourth-largest shareholder is Dunamu Co., a fintech firm that focuses on blockchain asset buying and selling. It operates the cryptocurrency trade Upbit, a number one crypto trade in South Korea.
It was based by Track Chi-hyung, who Forbes estimates is price $950 million.
As of June 20, Dunamu held 2.30 million shares of HYBE, or 5.53% of the overall, valued at $283.4 million as of September 9.
Credit score: Large Hit
BTS
There’s little doubt that BTS – the boy band comprised of Jin, Suga, J-Hope, RM, Jimin, V, and Jungkook, are the musical phenomenon that propelled HYBE into its place as the largest Ok-pop company on this planet, and the group’s seven members have been rewarded for that with appreciable holdings of HYBE inventory.
In accordance with analysis from Korea CXO Analysis Institute, launched in late 2023 and reported on in Korean media, the seven members of BTS have been every given 68,385 shares of the corporate after they renewed their contracts in 2018.
Primarily based on the excellent quantity of shares as of June 30, that will give every of them about 0.16% of the corporate; nonetheless, a few of them seem to have offered some a part of that stake.
In accordance with the Korea CXO Analysis Institute’s knowledge, as of early 2023, three BTS members had lowered their stakes: J-Hope owned 62,784 shares as of that point, whereas RM and Jin held barely smaller stakes than that.
Nonetheless, the BTS members’ preliminary share of HYBE’s was bigger again in 2018 than it’s now, provided that they have been granted these shares earlier than HYBE’s 2020 IPO.
On the inventory worth on the finish of the buying and selling day on September 9, a holding of 68,385 shares would have been price round $8.42 million.
In all, the seven BTS members have been granted some 478,695 shares of HYBE, or round 1.15% of the overall excellent shares as of June 30.
Scooter Braun
As CEO of HYBE America, Scooter Braun owns a substantial chunk of HYBE: in line with HYBE’s semi-annual report, Braun held 362,292 shares of HYBE as of June 30, or round 0.87% of the overall.
As of the September 9 inventory worth, that stake would have been price about $44.6 million.
Different shareholders
HYBE’s mid-year disclosures additionally listed quite a lot of shareholders who’re executives both on the firm or at its associates, and who’re listed as proudly owning comparatively small stakes within the firm.
Notable amongst them is the above-mentioned Min Hee-jin. As of June 30, the previous ADOR CEO (pictured inset) held 2,700 shares of HYBE, or 0.01% of the overall, per HYBE’s DART submitting.
HYBE’s regulatory submitting additionally lists Lee Da Hye as a shareholder, with 2,161 shares.
Da Hye is CEO of Pledis Leisure, one other label inside HYBE’s multi-label system. HYBE took a majority stake in Pledis in 2020. Da Hye works alongside Sung Soo Han, Pledis Leisure’s founder and ‘Grasp Skilled’. Da Hye’s holdings quantity to 0.0005% of all excellent shares.
In accordance with HYBE’s regulatory submitting, it owned a 90% stake in Pledis as of June 30.
Additionally listed as a shareholder is Lee Ga-jun, the Head of Operations at Belift Lab, a label began as a three way partnership between HYBE and CJ ENM in 2018, and absolutely acquired by HYBE in 2023. Belift is finest recognized for being the label behind Ok-pop stars ENHYPEN. In accordance with HYBE’s regulatory submitting, it owned 100% of Beflift lab as of June 30.
Lee is listed as proudly owning 1,562 shares of HYBE, or 0.0004% of the overall.
Then there’s Shin Younger-jae, till lately the President of BIGHIT MUSIC, the HYBE label whose title the complete firm wore, till its rebranding as HYBE in 2021. As a part of a reorg earlier this 12 months, Shin was appointed President of HYBE MUSIC GROUP APAC.
In accordance with HYBE’s semi-annual report, Shin held 1,302 shares of HYBE as of June 30, or 0.0003% of the overall.
One other notable listed shareholder is Joon Choi, CEO of HYBE-owned Weverse, the fan platform that varieties a key a part of the Ok-pop big’s technique to monetize superfans.
Weverse has seen vital progress in customers over the previous a number of years, making the app a closely-watched phenomenon within the music business. Some are doing greater than watching; Common Music Groupinvested in Weverse earlier this 12 months, as a part of a 10-year unique distribution deal between UMG and HYBE.
As of June 30, Joon held simply 60 shares in HYBE.
HYBE held a 55.4% stake in Weverse as of June 30, in line with its regulatory submitting.
The corporate confirms in its regulatory submitting that the quantity it spent to accumulate the 55.4% stake in Weverse was 164.4 billion KRW ($122m at right this moment’s trade charge).
In accordance with HYBE, the remaining shares of Weverse are owned by Korean tech and software program firm Naver and “different shareholders”.
Sources inform MBW that UMG made a minority funding in Weverse as a part of its partnership with HYBE, as introduced in March.
In 2021, Naverinvested roughly 354.8 billion received (roughly $321.6m) in HYBE subsidiary beNX – the HYBE subsidiary that developed Weverse. BeNX then acquired Naver’s V LIVE division.
On the time, the board of HYBE, then often called Large Hit Leisure, voted to vary the title of beNX to WEVERSE COMPANY Inc.
The customers, content material and providers of Weverse and V LIVE have been then built-in to create a single international fan neighborhood platform.Music Enterprise Worldwide
