HYBE’s stock, which had hit a low due to multiple challenges, is now showing signs of recovery. This positive shift in sentiment is largely attributed to expectations that the ongoing dispute involving Min Hee-jin, CEO of HYBE’s subsidiary ADOR, may soon be resolved. Korean institutional investors, in particular, have been steadily buying up shares, contributing to the rebound.
According to the Korea Exchange (KRX), the S. Korean institutional investors have been net buyers of HYBE stock for eight consecutive trading days since Aug. 21, purchasing shares worth a total of 37.4 billion won ($28 million). This is more than double the amount bought by foreign investors during the same period, who acquired approximately $12 million worth of shares.
During this period of institutional buying, HYBE’s stock price has been on an upward trajectory. After dipping to the low 160,000 won($119.62) range in mid-August, the stock closed at $137.86 on Aug. 30, even reaching $140.85 at one point during the day.
Earlier in August, institutions were largely selling off HYBE shares. On Aug. 9, they sold $12.3 million worth of stock, coinciding with foreign investors offloading $12.7 million. This sell-off occurred right after a minor controversy involving HYBE’s chairman, Bang Si-hyuk, who was spotted in Los Angeles with popular Korean internet personalities, leading to some public criticism. HYBE clarified that Bang was merely assisting the personalities with restaurant reservations and sightseeing.
Adding to the negative sentiment were issues involving BTS member Suga (Min Yoon-gi), whose incident of driving under the influence on an electric scooter became a topic of public debate.
These incidents seemed to have rattled both domestic and foreign investors, leading to significant sell-offs around Aug. 14, where institutions sold $15.2 million and foreign investors sold $2.3 million. Despite retail investors stepping in to buy $17.9 million worth of shares, the stock still dropped by 4.6% that day.
The recent turnaround by institutional investors suggests they believe HYBE’s stock has bottomed out. The price had fallen to levels similar to those seen early last year, when concerns about BTS members’ mandatory military service were dampening investor sentiment. This may have led institutions to consider the stock undervalued and a good opportunity for bargain buying.
Lee Ki-hoon, an analyst at Hana Securities, noted that while album bulk buying in China has decreased by 30-50% from its peak, further declines are likely to be limited.
He added that the biggest growth drivers for HYBE in the next year would be the return of BTS as a full group and the introduction of a subscription model for Weverse. He emphasized the strong synergy between HYBE’s intellectual property (IP) and its platform, suggesting significant potential for value creation.
Another factor boosting investor confidence is the apparent resolution of the dispute with Min Hee-jin.
On Aug. 27, ADOR’s board of directors appointed a new CEO, Kim Ju-young, replacing Min. This move followed the ousting of Min’s allies from the board during a special shareholders’ meeting in May, so her removal as CEO was expected. Moreover, HYBE has reportedly filed a lawsuit to terminate its shareholder agreement with Min, which, if successful, would nullify her stock sale rights.
