articleK-Pop

Bang Si-hyuk’s cold attitude resulted in GFRIEND’s disbandment… HYBE’s ‘up and down’ stock price performances and hope in NewJeans

Is it possible for girl groups to become a miracle of K-pop like BTS?

When HYBE took over Source Music, which was called “the miracle of small and medium companies”, in 2019, many people expected HYBE to raise Source Music’s girl group GFRIEND with a new look. 

However, HYBE’s Chairman Bang Si-hyuk stayed silent. Source Music then announced the end of its exclusive contract with GFRIEND on May 22nd, 2021.

Making their debut in January 2015, the six-member girl group GFRIEND promoted the “innocent idols” concept with an aim to continue the tradition of SM girl group Girls’ Generation. Overcoming the poor environment of their company, GFRIEND was formed and even became the group that won the most music show trophies in 2016. 

G-FRIEND

Ranking 3rd among third-generation girl groups and 6th among all groups in the history of music shows, GFRIEND was highly evaluated as a strong group with both popularity and recognition. However, GFRIEND generated less profit than the amount of money invested in them because their fandom is weaker than that of boy groups. In short, they didn’t earn money for the company.

Source Music recorded a net loss of 91.64 million won in 2019. Even after it was acquired by HYBE, the net loss figure was about 2.3 billion won in 2020. It was the aftermath of GFRIEND’s poor performance in album and concert sales. HYBE eventually disbanded GFRIEND and Source Music was given the task of fostering the next generation girl group on the behalf of HYBE Labels. 

Newjeans

HYBE’s stock price, which plunged due to the “shocking rumors of BTS’s disbandment”, has been rising up with expectations for the new girl groups. The stock market’s expectations are focused on whether HYBE, which has gained significant success with boy groups, will be able to achieve impressive achievement with a girl group that can be comparable to BLACKPINK of YG Entertainment.

As of 2:20 p.m on July 26th, HYBE’s stock (172,000 won ▼4,500 -2.55%) is trading at 173,000 won in the current KOSPI market, a down of 3,500 won (1.98%) compared to the figure of the previous day. In June, it went down to 138,000 won (June 23rd) due to the ‘BTS shock’ and has recently made a steady recovery to the range of 170,000 won. 

Hybe

After the disbandment of GFRIEND, Source Music introduced HYBE’s first girl group LE SSERAFIM on May 2nd. LE SSERAFIM consists of 6 multinational members: Kim Chae-won, Sakura, Huh Yun-jin, Kazuha, Kim Ga-ram, and Hong Eun-chae. The team name was created using the anagram of “IM FEARLESS”. Unlike their group’s name, which shows their confidence in moving forward without fear, LE SSERAFIM faced a big crisis right after their debut due to Kim Ga-ram’s school bullying controversy and withdrawal.

Later, HYBE was once again negatively affected by K-pop representative boy group BTS’s announcement of a group activity hiatus 9 years after their debut. On the day the announcement was reported, HYBE’s stock price dropped by 24.87%.

Le Sserafim

Amid LE SSERAFIM’s school bullying controversy and BTS’s group activity suspension, HYBE’s other girl group NewJeans is scheduled to debut on August 1st. NewJeans is formed by CEO Min Hee-jin of ADOR – HYBE’s label. Since July 22nd, NewJeans has released a series of music videos for the title tracks, raising music fans’ high expectations for their official debut. ADOR’s CEO Min Hee-jin is known by the nickname “Midas touch” because she used to raise popular groups, such as Girls’ Generation, SHINee, and EXO, when she worked at SM Entertainment in the past.

Analysts in the stock market are lowering Hive’s 2022 and 2023 profit forecasts due to the aftermath of BTS’ group activity suspension and the new artists’ debut production cost. However, while considering the absence of BTS, it was analyzed that the lead of Seventeen and the performance of new artists, such as the girl group NewJeans to debut on August 1st and the boy group that HYBE Japan will introduce in the fourth quarter of this year, would create a momentum for HYBE’s stock prices.

Newjeans

Lee Hyun-ji, a researcher at Eugene Investment & Securities, said, “Although it is regrettable that BTS will not be active as a whole group, attention should also be paid to profitable artists who are being overshadowed by BTS, such as Seventeen”, adding “Various momentums can also be created by rookie groups like NewJeans.”

According to financial information provider WiseFn, HYBE’s second-quarter sale is estimated to be around 291.8 billion won (a year-on-year up of 76.53%), and its operating profit is estimated to be 86.7 billion won (up 209.4%). In fact, HYBE’s performance in the second quarter, which will be announced soon, is likely to fall slightly below the forecasted figure, but BTS and Seventeen’s concert sales are expected to add to the expansion of sales. 

Source: NewsMT

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