[HYBE Owner Risk] Bang Si-hyuk Faces Detention: HYBE's Business Under Warning Signs

Police Request Detention Warrant for Bang Si-hyuk on Fraudulent Trading Charges
Securities Industry Continues to Lower Target Prices

As Bang Si-hyuk, Chairman of HYBE, faces the possibility of arrest, the company—previously buoyed by expectations of improved performance thanks to BTS’s comeback—is now experiencing instability. Despite generating over 2.6 trillion won in revenue last year, HYBE reported disappointing results, with profits falling short of even 50 billion won due to BTS’s mandatory military service and sluggish performance in the United States. With legal risks mounting for Chairman Bang, who has spearheaded BTS’s full-group comeback and led HYBE’s global expansion efforts, there are growing concerns that the company’s ongoing projects may face significant setbacks.

Bang Si-hyuk, Chairman of HYBE, is appearing at the Financial Crimes Investigation Unit of the Seoul Metropolitan Police Agency in Mapo-gu, Seoul, on September 15, 2025. Photo by Dongju Yoon

On the 21st, the Financial Crimes Investigation Unit of the Seoul Metropolitan Police Agency filed a request with the Seoul Southern District Prosecutors’ Office for an arrest warrant for Chairman Bang on suspicion of fraudulent transactions under the Capital Markets Act. Bang is accused of telling existing HYBE (then Big Hit Entertainment) investors in 2019 that there were no plans for an initial public offering (IPO), then allegedly directing them to sell their shares to a special purpose company (SPC) established by a private equity fund (PEF) set up by HYBE executives. The SPC then sold the shares after HYBE proceeded with the IPO, and the police believe that Bang personally reaped approximately 190 billion won in unfair gains by receiving 30% of the sales profits through a prearranged contract with the SPC. Bang’s legal team maintains that he did not deceive any investors.

The possibility of Bang’s arrest has heightened concerns about owner risk at HYBE. The company had been expected to improve its financial performance this year as its artists resumed activities. BTS released their fifth full-length album, ‘ARIRANG,’ on March 20, and other artists under HYBE—LE SSERAFIM, ILLIT, KOR-TIS, and TXT—are also scheduled for comebacks in the second quarter of this year. Bang has been deeply involved in the production of albums by HYBE’s artists, and it is reported that the concept for BTS’s comeback album, ARIRANG, was his idea, and he persuaded the members to participate.

Setbacks Expected in Overseas Business Expansion... Series of Negative Earnings Forecasts

The group BTS held a free comeback concert, 'BTS Comeback Live: Arirang' (BTSTHECOMEBACKLIVE｜ARIRANG), on the 21st at Gwanghwamun Square in Seoul. BTS is performing at the concert. 2026.03.21. Photo by Joint Press Corps

If an arrest warrant is issued, Bang’s ability to conduct overseas business will be restricted, likely impacting HYBE’s overseas operations as well. According to HYBE’s 2025 annual business report, the company has invested in a total of 23 joint ventures and affiliates, 15 of which are based in the United States. These U.S.-based companies not only support affiliated artists through record label operations and management services but also cover sectors such as food distribution and consumer goods, reflecting HYBE’s efforts to diversify into areas like food and apparel. Notably, although HYBE secured numerous network channels through its acquisition of Ithaca Holdings in the U.S., the company incurred substantial costs without meaningful returns while pursuing various genres.

Amid mounting owner risk, HYBE’s stock price has also been fluctuating. The securities industry has recently issued a series of negative outlooks regarding the company’s earnings. On the 21st, IBK Investment & Securities lowered its target price for HYBE from 480,000 won to 400,000 won. Yoo Hyuk Kim, an analyst at IBK Investment & Securities, explained, “HYBE’s operating profit for the first quarter of this year is estimated at 3.99 billion won, which falls short of the market expectation of 4.3 billion won.” He also noted the increased settlement burden resulting from BTS’s third contract renewal. Similarly, Meritz Securities has projected that HYBE’s first-quarter results will fall short of expectations, lowering its target price from 450,000 won to 390,000 won.

There are also criticisms that the company’s revenue structure itself has reached its limits. In the entertainment industry, revenue from albums, concerts, and advertisements is considered direct participation, while content based on intellectual property (IP), merchandise planning (MD), licensing, and fan clubs are classified as indirect participation. As the proportion of indirect revenue, which relies on external partnerships, has grown, the cost ratio has also increased. According to HYBE’s 2025 annual business report, the share of album and music sales in total revenue decreased to 29.17% in 2025 from 38.17% in 2024. Conversely, the share of MD and licensing revenue rose from 18.63% in 2024 to 21.53% last year. Hyunji Lee, a researcher at Eugene Investment & Securities, stated, “Due to the increased cost ratio from BTS’s higher share in the first quarter, as well as the upfront recognition of production costs related to albums and tours, profits were likely somewhat sluggish.”

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