SM, JYP & YG suffer big losses in market cap due to SM acquisition battle, experts raise hope for stock increase with artists’ performances
According to Korea Exchange on March 14th, JYP Entertainment saw a plunge of 6,600 won (8,49%) from the previous trading day (the 10th) and closed at 71,100 won per share while YG Entertainment closed at 54,600 won, a drop of 2,900 won (5,04%).
Despite not involving in the acquisition battle of SM Entertainment, the stock prices of JYP and YG also rose during the intense competition because the 3 companies, together with HYBE, are considered the TOP 4 entertainment agencies in Korea.
In particular, JYP’s stock rose 7,76% from 72,100 won on February 1st to 77,700 won on March 10th. During the same period, YG’s stock soared 10,57% from 52,000 won. However, when the news of a sudden agreement between HYBE and Kakao broke out, all the gains were returned on the 13th. On the same day, SM stock plunged by 23,48%. This caused the 4 companies to suffer a total market capitalization loss of 870 billion won (5,82%) in just one day.
On the 13th, SM’s market capitalization decreased, making SM fall from 5th to 9th place in the KOSDAQ market. Except for HYBE, whose market capitalization increased due to a rebound in stock prices, SM, JYP, and YG all lost large amounts. The stocks of other entertainment companies, such as CUBE Entertainment and CJ ENM, also went down.
Based on an analysis of the major entertainment business, securities firms have raised their target stock prices.
Regarding JYP, Kyobo Securities researcher Park Sung Guk viewed the increase in album sales for Stray Kids’ Japanese full first album and previous works, as well as the increase in album sales and tour expansion for TWICE, as favorable factors. Our target is to increase the stock price by 8.04% to 94,000 won.
Hana Financial Investment researcher Choi Jong Gyeong predicted that the world tour of BLACKPINK, which will include 56 shows as the longest world tour, would have a significant impact, and TREASURE and BABYMONSTER IPs are also growing steeply. They raised the target stock price by 22.95% to 75,000 won.
Hanwha Research Center researcher Park Soo Young mentioned SM’s plan to debut one girl group and two boy groups within the year, and analyzed that “the IP production and profitability enhancement strategy based on SM 3.0 strategy is positive for stock prices and performance.” Their target stock price is 135,000 won, an increase of 21.62%.