Big Hit Entertainment Ltd.’s Chairman and CEO Bang Si-Hyuk, fourth from left, poses with other participants for the media during the listing ceremony of the company at the Korea Exchange in Seoul, South Korea, Thursday, Oct. 15, 2020. The company, that manages boy band BTS made its market debut amid criticism by Chinese internet users after the group’s leader thanked Korean War veterans for their sacrifices. (Korea Pool/Yonhap via AP)
SEOUL, South Korea (AP) — Powered by strong support from avid fans, shares of South Korea’s Big Hit Entertainment, the company that manages global pop sensation BTS, soared in their trading debut Thursday in Seoul.
Big Hit’s solid debut after an IPO that netted more than $800 million was widely expected by analysts given the loyalty of the fan base to the seven-member boy band that has been dominating Billboard charts after gathering a huge following around the globe.
Despite the concert-killing COVID-19 pandemic, Big Hit has prospered thanks to huge demand for its online content, including livestreamed BTS concerts that reportedly attracted more than 1.7 million fans.
The company’s shares opened at 270,000 won ($236), about double their initial public offering price. They surged 30%, hitting the daily trading limit, before falling back and closing at 258,000 won ($225).
Big Hit has a tight grip over its revenue streams, with BTS merchandise and other products exclusively sold through its “Weverse” e-commerce platform.
Big Hit raised 926.6 billion won ($841 million) in what was South Korea’s largest IPO since 2017.
“The company has managed to grow beyond the traditional revenue sources of album sales and concerts and diversify its business through online channels,” wrote Ahn Jin-ah, an analyst from South Korea’s E-Best Investment and Securities, in a report that described Big Hit’s stock market entrance as a “drop of dynamite.”
BTS debuted in 2013 and has a legion of global supporters who call themselves the “Army.” It became the first K-pop act to top Billboard’s Hot 100 chart last month with their first all-English song “Dynamite.”
The band — consisting of J-Hope, RM, Suga, Jungkook, V, Jin and Jimin — has performed in sold-out arenas around the world and was even invited to speak at the U.N. General Assembly last month.
Big Hit’s stock market debut came just days after Chinese nationalists erupted in anger at BTS after its leader, RM, thanked Korean War veterans for their sacrifices while receiving a reward for promoting U.S.-South Korea relations.
Chinese internet users and state media took RM’s comments as a slap at China, whose soldiers fought alongside North Korea against South Korea and U.S.-led allied forces during the 1950-53 war that was halted by an armistice but no peace treaty.
BTS has yet to respond to the comments.
7 Great Biotech Stocks That Don’t Depend on a Coronavirus Cure
Biotech stocks are some of the most volatile for investors to include in their portfolio. And that volatility can be hard to predict. Biotech companies don’t have a firm correlation with the overall economy. And what can add to the challenge is that many of these companies are small-cap companies that are not well-known names.
These small biotech stocks may shoot higher based on a vaccine or drug candidate that gets national attention. But these small-cap stock also reflect the adage of letting the buyer beware. Because the stark reality for many investors is that the vast majority of these treatments never make it past clinical trials. And that means that a stock that goes up rapidly can move down just as fast.
We’re seeing that right now with the multitude of companies that are competing in the race towards a vaccine and/or treatment for Covid-19 and the novel coronavirus that causes the disease. And if you’ve been good at timing the market, you could have made some good money on some of these candidates.
Of course, if you held the stock too long, you could have lost your shirt as well.
That doesn’t mean however that buy and hold investors should avoid the biotech sector altogether. There are still some attractively priced small-cap biotech companies that are working on treatments for a range of conditions that provide them with a large addressable base. And we’ve identified seven of these stocks in this special presentation.
View the "7 Great Biotech Stocks That Don’t Depend on a Coronavirus Cure".