'Cheongyak Monster' BigHit, Will It Become a Box Office Dynamite?

Public Offering Subscription for General Investors from 5 to 6 Days
Will It Set an All-Time Record... Attention Focused
If Subscription Deposit Reaches 100 Trillion, Even 100 Million Won Invested Gets 1 Share Allocation

On the 5th, investors visited the Korea Investment & Securities branch in Yeouido, Yeongdeungpo-gu, Seoul, to inquire about the subscription of Big Hit Entertainment's public offering shares.

[Asia Economy Reporter Minwoo Lee] "Not only Big Hit Entertainment (Big Hit), but I plan to apply for all future public offerings."

Mr. Kim (64) said this after completing his subscription for Big Hit's IPO shares at the Korea Investment & Securities branch located in Yeouido, Yeongdeungpo-gu, Seoul, on the morning of the 5th. Mr. Kim explained, "I applied for IPO subscriptions for SK Biopharm and Kakao Games as well," adding, "Since even small amounts can yield definite profits, I plan to invest by making the most of my ample retirement funds."

On the morning the subscription for Big Hit, the agency of the popular idol group BTS (Bangtan Sonyeondan), began at 10 a.m., senior citizens in their 60s and above started to appear in small groups. However, it was not as crowded as during the SK Biopharm subscription in June. This seems to be because many investors who have already experienced the IPO craze chose to subscribe online.

According to the financial investment industry, Big Hit, which will be listed on the KOSPI market on the 15th, is conducting a two-day public subscription for general investors until the 6th. This subscription is expected to mark the peak of the IPO craze that started with SK Biopharm. It is highly likely to break the record for the largest subscription deposit amount set by Kakao Games last month (58.5542 trillion KRW). Since SK Biopharm and Kakao Games both recorded a 'ttasang' (IPO price doubled at the opening price followed by a limit-up) on their first day of listing, the perception that profitability is guaranteed has spread. Previously, SK Biopharm recorded a 'ttasang' on its first day of listing and soared to 269,000 KRW within four trading days, representing a 550% increase compared to the IPO price. Kakao Games also recorded a 'ttasang' on the first day and rose about 10% more the following day.

Recent global acclaim for BTS has also heightened expectations. BTS's new song "Dynamite" became the first Korean song to reach number one on the US Billboard 'Hot 100' immediately after its release. After holding the top spot for two consecutive weeks, it briefly dropped to second place but returned to number one on the 29th of last month, its fifth week after release. The Korea Culture & Tourism Institute's Cultural Industry Research Center analyzed the economic impact of "Dynamite" by comprehensively examining Big Hit's sales scale, the Bank of Korea's input-output tables, customs export-import trade statistics, and Google Trends search volume, estimating it to be as high as 1.7 trillion KRW. Given its more widespread public recognition than Kakao Games, it is expected that the investment enthusiasm will reach an all-time high.

The group BTS is posing for a photo before appearing on NPR's famous music program 'Tiny Desk Concert.' (Provided by Big Hit Entertainment) [Image source=Yonhap News]

Big Hit's IPO price was set at 135,000 KRW, the top end of the desired price range, during the institutional investor demand forecast conducted on the 24th and 25th of last month. The general subscription volume is 1,426,000 shares, which is 20% of the 7.13 million new shares. The allocation is as follows: NH Investment & Securities 648,182 shares, Korea Investment & Securities 555,584 shares, Mirae Asset Daewoo 185,195 shares, and Kiwoom Securities 37,039 shares. The total public offering amount is 192.51 billion KRW, and the market capitalization based on the IPO price is approximately 4.8 trillion KRW, significantly surpassing Kakao Games' market cap in the low 4 trillion KRW range.

There are also expectations that the subscription deposit amount could reach 100 trillion KRW due to this enthusiasm. Even applying the institutional demand forecast competition rate (1,117 to 1), the subscription deposit amount would reach 107 trillion KRW. Since Kakao Games' general investor IPO subscription competition rate was 1,524.85 to 1, surpassing the institutional investor demand forecast competition rate of 1,479 to 1, it is expected that Big Hit will also break the 100 trillion KRW subscription deposit barrier.

Assuming a subscription deposit of 100 trillion KRW, the general investor competition rate would be 1,038 to 1. This means that if you invest 100 million KRW, you would be allocated 1.4 shares. In this case, according to the 5 companies 6 shares principle, you would actually receive only 1 share. Shares are allocated only if the fraction exceeds 0.6 shares. If you invest less than the minimum amount of 70 million KRW required to receive 1 share, you may not receive any shares. For example, if you invest 60 million KRW, you would theoretically be allocated 0.8 shares, but if the allocation is less than 1 share, the 5 companies 6 shares rule may not apply. Therefore, investors are striving to prepare as much subscription capital as possible. Mr. Kim (47), who works at a large corporation, said, "As with the Kakao Games subscription, I plan to provide more than 300 million KRW as a deposit through secured loans against deposits."

A representative from NH Investment & Securities, the joint lead manager, said, "Unlike other entertainment agencies, Big Hit is a company with global competitiveness and received high interest with a demand forecast competition rate exceeding 1,100 to 1," adding, "It is expected that the IPO subscription will be very successful."

This content was produced with the assistance of AI translation services.