State Champ Radio SM Entertainment
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Shares of SM Entertainment gained 11.8% to KRW 117,900 ($92.88) this week, making the K-pop company the greatest gainer on the Billboard Global Music Index. The home of groups such as NCT 127 and Red Velvet, SM got good news this week after boy band EXO’s latest release, EXIST — The 7th Album, sold over 1 million copies in South Korea on its first day of release. In the United States, the group currently has four of the top five songs on Billboard’s Hot Trending Songs chart. Year to date, SM Entertainment shares are up 37.5%.
Led by SM Entertainment’s double-digit gain, 13 of the Billboard Global Music Index’s 21 stocks finished in positive territory this week. The index rose 1.7% to 1,355.35, its third-straight weekly increase and the sixth in the last seven weeks. Music stocks lagged behind many major indexes, however. In the United States, the S&P 500 and the Nasdaq composite gained 2.4% and 3.3%, respectively. The United Kingdom’s FTSE 100 improved 2.4%. And South Korea’s KOSPI composite index rose 4%.
Spotify continues its hot streak by gaining 9.6% to $172.03, bringing the stock’s year-to-date improvement to 117.9%. The streaming giant got a boost this week after analysts at Morgan Stanley and Wells Fargo increased their price targets to $185 and $250, respectively. Wells Fargo analysts are enthusiastic about Spotify’s prospects to improve its margins following the company’s layoffs and reduction of podcast content costs. Long-awaited price increases in the United States could improve Spotify’s gross margin by three percentage points and add nearly $727 million of revenue in 2024, according to the analysts.
Another K-pop company experienced the index’s largest decline this week: Shares of HYBE, home to BTS and Tomorrow X Together, fell 10.3% to KRW 256,500 ($202.08). The company was in the South Korean media this week following complaints of sexual harassment by security guards at an &TEAM singing event in Seoul. In a statement, HYBE apologized to the fans and explained that attendees at such events are searched to prevent recordings from leaking to the public.
Hipgnosis Songs Fund Ltd.’s decline of 3.9% to 0.74 pounds per share was the index’s biggest decline of the week after HYBE. On Thursday (July 13), Hipgnosis reported a $12.9 million improvement in pro-forma annual revenue million in calendar year 2022, although both gross and net revenue declined due mainly to two large, non-recurring adjustments. Still, investors remain wary of the stock, which has declined 14.3% year to date. As Billboard reported this week, Hipgnosis is shopping some assets that could help bolster its share price if sold. Shareholders will get a chance to weigh in on the fund’s future at the annual meeting in September by voting to change fund managers, liquidate the fund or stay on course.
Shares of Cumulus Media gained 9.7% this week, the leading stock in the Billboard Global Music Index and one of only four stocks in the 21-company index to end in positive territory Friday (June 23).
Overall, the Billboard Global Music Index declined 3.5% to 1,287.41 — more than double the 1.4% declines of the S&P 500 and Nasdaq. Music stocks were more in line with the Nasdaq when the overpowering effects of a small number of tech companies are removed, however. That’s because a few powerhouses — such as Microsoft, Apple, Alphabet and Amazon — often account for a large fraction of the Nasdaq’s gains. To that point, QQQE, an exchange-traded fund that gives equal weight to 100 Nasdaq stocks, declined 2.9% this week.
In the United Kingdom, the FTSE 100 declined 2.4%. South Korea’s KOSPI index fell 2.1%. Central banks in England, Turkey and Norway raised interest rates this week. Investors can reasonably expect more rates hikes in the United States, too. Federal Reserve chairman Jerome Powell said on Wednesday the central bank may continue to raise rates — there have been 10 since March 2022 — but “to do so at a more moderate pace.” When central banks raise interest rates, stocks tend to fall because businesses and consumers are expected to cut back on spending and higher rates make bonds relatively more attractive to stock returns.
Cumulus Media improved to $3.40 a week and a half after the company announced it will sell about 1.75 million Class A common shares — nearly 10% of outstanding shares — at $3.25 per share in a modified Dutch auction that closed on June 9. While the sale will gross about $5.7 million, not including fees and expenses, the final result was well below the company’s goal to sell up to $10 million of shares as part of a previously announced $50 million share repurchase plan.
Shares of French music streaming company Deezer gained 3.6% to 2.32 euros ($2.54), bringing the stock’s year-to-date loss to 20.5%. U.S. streaming company LiveOne gained 3.3% to $1.58. Year-to-date, LiveOne has gained 145.3%. The only other company with a week-over-week improvement was South Korea’s HYBE, which improved 1.2% to 301,000 KRW ($236.91).
The other three Korean music companies declined this week: SM Entertainment and YG Entertainment each fell 5.6% and JYP Entertainment dropped 3.5%. Still, K-pop has been a resounding success for investors in 2023. Led by JYP Entertainment’s 93.7% year-to-date gain, the four Korean companies’ stocks have risen an average of TK% in 2023.
One company, Anghami, was unchanged and the index’s other 16 stocks were in negative territory this week. MSG Entertainment had the Billboard Global Music Index’s largest decline after dropping 17.1%. Sphere Entertainment Co., which spun off MSG Entertainment in April, intends to sell part of its 33% stake in MSG Entertainment. The news dropped the live entertainment company’s share price 12.1% on Wednesday. At Friday’s closing price, Sphere Entertainment’s sale of 5.25 million shares would gross about $170 million that could help fund the state-of-the-art Sphere at The Venetian Resort in Las Vegas that’s set to open in September.
Shares of SM Entertainment gained 15.3% this week, making the K-pop company the greatest gainer among the 21 music stocks in the Billboard Global Music Index. Although the company wasn’t the subject of any significant news items that typically affect share prices — earnings, investments or partnerships — its shares nonetheless rose to 117,600 KRW ($92.07), bringing the year-to-date gain to 53.3%.
It’s not just SM Entertainment, though. K-pop is booming in 2023. Shares of the index’s other South Korean music company, HYBE, gained 6.1% this week and have gained 71.5% in 2023. Outside the index, JYP Entertainment and YG Entertainment have gained 100.6% and 88.4%, respectively, year to date.
With 16 of its 21 stocks in positive territory this week, the Billboard Global Music Index improved 5% to 1,334.28, its best one-week performance since November. The biggest contributors to the index’s value posted strong single-digit gains. Spotify improved 6.3% to $159.99, Universal Music Group gained 3.8% to 20.16 euros ($22.11) and Warner Music Group jumped 9.3% to $27.16. Meanwhile, Live Nation gained 7.2% to $90.18 and on Thursday (June 15) closed above $90 for the first time since Sept. 15.
Two other stocks had double-digit gains this week. Streaming company LiveOne added 13.3% to $1.53, bringing its year-to-date gain to 137.6%, while Sphere Entertainment Co. climbed 10.9% to $29.29. Since Sphere separated from MSG Entertainment’s concert promotion business on April 20, its shares have gone up more than 14%. On Sept. 29, U2 will launch the MSG Sphere at the Venetian with a residency that extends through Dec. 16.
While stocks were generally up this week, music stocks fared better than the major indexes. The S&P 500 gained 2.6% to 4,409.59, its best week since March. The Nasdaq composite improved 3.2% to 13,689.57, also marking its best week since March. Outside the United States, South Korea’s Kospi index dropped 0.6% to 2,625.79, while the FTSE 100 in the U.K. gained 1.1% to 7,642.72.
German promoter and ticketing company CTS Eventim had the week’s largest decline at 18.2%, making it the only music stock on the index with a double-digit loss. As Billboard reported on Wednesday, the German company’s share price fell precipitously in the two days following a critical segment on the German public television show ZDF Magazin Royale.
A South Korean law firm representing three members of K-pop boy band EXO says the singers are pursuing legal action against their longtime label and management agency SM Entertainment over contractual issues related to “slave contracts.”
In a press release, Lin Law Firm claims it has represented K-pop stars Baekhyun, Chen and Xiumin — who are members of EXO and also perform together in a splinter trio unit named EXO-CBX — since March over pay and contract disputes with SM Entertainment, who debuted EXO in 2012 and are home to acts like TVXQ!, Girls’ Generation, SHINee, NCT and aespa.
Baekhyun, Chen and Xiumin (whose full names are Byun Baekhyun, Kim Jongdae and Kim Minseok, respectively) claim SM has shown a lack of payment transparency and required unreasonably long contracts extending beyond 12 years, according to a five-page document reviewed by Billboard that was sent by Lin Law Firm attorney Lee Jaehak.
The firm alleges that despite the trio signing exclusive, long-term contracts with SM, the K-pop company has not provided full data about the artists’ payments as they recently requested. Lin Law adds that the artists have always trusted SM’s payments despite Korean law requiring entertainment companies to provide updates on payment settlements twice a year.
Lin Law Firm also claims that SM has used its position in the K-pop market to force artists to sign with the company for longer than the industry standard seven years — deals it calls “slave contracts.” The firm says that SM automatically extends artist contracts by three years if the artist works overseas, which applies to Chen and Xiumin, as the two were originally part of the China-focused group EXO-M. Meanwhile, Baekhyun has released solo music in Japan and was a part of the U.S.-focused, Billboard 200-topping “supergroup” SuperM.
The final point in Lin Law’s document includes an apologetic message to fans and a pledge to resolve the dispute.
SM Entertainment has not responded to Billboard‘s request for comment. Baekhyun, Chen and Xiumin have not publicly commented on the matter, either.
Alleged “slave contracts” are a historically sensitive spot for SM Entertainment. In 2009, three of the original five members of boy band TVXQ! asked Korean courts to examine their 13-year contracts, citing extreme length and worries about payment distribution. Over the course of three-plus years of legal battles, singers Kim Jaejoong, Park Yoochun and Kim Junsu won the right to work independent of their SM deals and formed a new boy band named JYJ. By November 2012, the two parties mutually agreed to terminate the SM contracts, which would have expired in 2016 at the earliest.
As a result, South Korea’s Fair Trade Commission created a rule in 2010 that did away with so-called “slave contracts,” requiring entertainment companies to sign individuals for a maximum of seven years initially. Lin Law does not explain how SM could legally surpass the rule.
As members of EXO, Baekhyun, Chen and Xiumin helped lead K-pop’s international expansion with the group’s dual focus on releasing music in both Korean and Chinese. In April 2015, EXO set a new record for the largest sales week for K-pop artists in America at the time when its Exodus album sold 6,000 copies, according to Luminate. It held that record until late 2016.
EXO has scored five No. 1s on Billboard‘s World Albums chart, while EXO-CBX also topped the chart with its debut record Hey Mama! from 2016. All three members have also released solo albums, with Chen releasing a new song, “Bloom,” on May 30 through SM Entertainment. After several EXO members fulfilled their South Korean military duties, the group reunited for the first time in years. SM has confirmed the group would release a new studio album together this year.
On April 3, Billboard broke the news that Jimin’s track “Like Crazy” reached No. 1 on the Billboard Hot 100 — a first for a solo Korean artist — while his album, FACE, debuted at No. 2 on the Billboard 200. Released by Big Hit Music, one of the labels under Korean entertainment company HYBE, “Like Crazy” currently marks the best performance by a member of K-pop supergroup BTS, whose hiatus announcement last year presented a significant challenge to HYBE’s ability to forge another chart success in the United States. “Like Crazy” reached only No. 11 in South Korea, although FACE topped album charts in South Korea and Japan.
Investors took note of Jimin’s U.S. accomplishments. The following day, HYBE’s share price on Korea Exchange rose as much as 11.4% to 212,500 won ($161) before ending the day at 205,000 won ($155), up 7.5% from the previous day (as of April 17, it had risen 40%). That was the highest closing price since June 10 of last year — three trading days before BTS confirmed it would take a hiatus, worrying investors and sending HYBE’s share price down 28% in a single day. For a company with grand ambitions to build off of the success of BTS, “Like Crazy” was an important validation.
The music industry should take note, too. HYBE did with Jimin what all South Korean music companies are attempting with increasing urgency: ride the wave of K-pop’s global success by expanding outside of Korea and build up operations in the United States, the world’s largest music market. “All the shareholders want to see the ability for them to diversify [their] portfolios,” says Sung Cho, CEO of Chartmetric and newly appointed board member of the pioneering K-pop agency SM Entertainment.
Exporting is what South Korea does best. “After the Korean War, the only way to survive was to export things,” says Cho. Over the last three decades, the success of companies such as Samsung, LG and Hyundai has turned the country of 52 million into a top 10 exporter, according to the World Bank. But in recent years, South Korea has become known not just for its exports of high-tech products and manufactured goods, but as a global entertainment dynamo as well. South Korea’s music business built its economic success into a trade surplus of about $3.1 billion for intellectual property of music and images in 2021, up from $800 million in 2020, according to the country’s Ministry of Culture, Sports and Tourism. The South Korean film Parasite won a 2020 Academy Award for best picture. A year later, Squid Game became the most watched series in Netflix history, a worldwide phenomenon that racked up 1.7 billion viewing hours in its first month.
South Korean music companies have become international powerhouses by drawing on hip-hop, R&B and pop music and selling the K-pop blend of these genres back to fervent fans in the United States, Japan and Europe. But to compete globally with larger companies, the South Korea approach to the music business, and not necessarily the music itself, could be the deciding factor. “We’re seeing not only the export of K-pop bands — the boy bands, the girl bands — we’re starting to see the export of the K-pop business model,” says Bernie Cho, president of DFSB Kollective, a Seoul-based artist and label services agency. SM Entertainment founder Lee Soo-man coined the term “cultural technology” in the ’90s for his system of producing K-pop and promoting it worldwide. Other K-pop companies have adopted a similarly disciplined, systematic approach to finding, developing and promoting musicians.
The widespread music-business anxiety about the death of artist development doesn’t apply to South Korea. Western labels fight bidding wars over viral artists with instantaneous popularity or favor proven artists and catalogs, leaving the task of building an audience to artists themselves or independent labels. In contrast, K-pop companies spend years recruiting and rehearsing talent, as well as giving artists instruction in a specific approach to the music business. “Combing through social media platforms like TikTok may give us a chance to sign artists who are technically proficient as music producers or performers, but we demand more from our artists,” says HYBE CEO Jiwon Park in an email to Billboard. That means trainees work with HYBE’s training and development department to “internalize the values of autonomy and responsibility” so they can navigate the expectations put on them.
To learn the U.S. market, South Korean companies have partnered with U.S. labels to distribute, market and promote their music. HYBE has a joint venture with Universal Music Group’s Geffen Records to create a U.S.-based girl pop group. JYP Entertainment has teamed with UMG’s Republic Records to form the global girl group America2Korea, or A2K. Additionally, Kakao Entertainment’s Starship Entertainment subsidiary has partnered with Sony Music Group’s Columbia Records to co-manage marketing and promotion of the six-member female group IVE in North America.
These U.S.-Korean partnerships have also given domestic labels a chance to learn the K-pop method of A&R. To Glenn Mendlinger, president of Imperial Music, a new division of Republic Records, the JYP partnership has provided insight into “what it is to build a fandom and foster it through immersive packaging and increasing the collectability of the products.” Mendlinger is impressed with JYP’s attention to detail and ability to build storylines for their artists. “That’s why they’re so successful,” he says in an email to Billboard. “The level of care is unparalleled and unrivaled in terms of its intimacy and diligence.”
But more and more, South Korean companies have boots on the ground and control of their destinies in the United States. HYBE is the furthest along in building out its stateside operations. In 2021, it acquired Scooter Braun’s Ithaca Holdings for $1.05 billion and named Braun the CEO of HYBE America, a genre-spanning collection of artist management and record labels that includes SB Projects, Nashville-based Big Machine Label Group and Atlanta hip-hop company Quality Control, which was acquired in February for $300 million. Those deals are “just the beginning,” HYBE chairman Bang Si-hyuk said in a speech in March. He believes building in the United States will give HYBE the “strong network and infrastructure” it needs to “minimize the cost of trial and error” and attain stronger bargaining power and distribution rates relative to local companies.
SM Entertainment, the company behind such groups as NCT 127 and aespa, and Kakao Entertainment have created a U.S. joint venture and plan to acquire a U.S.-based company to expand into hip-hop or R&B, according to SM’s road map made available to investors. Kakao now owns a 40% stake in SM Entertainment, having quelled HYBE’s attempt to buy a commanding stake and control its board of directors following a break with SM founder Lee.
South Korean music companies’ do-it-yourself nature extends to tech platforms, too. While most labels depend on the likes of Meta, Twitter and Fortnite to reach fans, HYBE owns its own social network, Weverse, and JYP and SM have a joint venture with tech company Naver called Beyond LIVE that streams live online concerts. SM also owns a social networking app, Bubble, and its artists will begin building fan communities at HYBE’s Weverse in September. It makes sense in one of the world’s most wired and wireless countries, says Cho of DFSB Kollective. In Korea, “youth culture, pop culture and digital culture are one and the same in many ways.”
For HYBE, Weverse not only diversifies its business but allows it to control how its artists communicate with their fans. With the addition of artists from North America and Japan, Weverse “will serve as a gateway to the fandom market in Asia, North America and the world,” says Park. With enhancements and new services, “Weverse will seek boundless expansion beyond K-pop.”
This story originally appeared in the April 22, 2023, issue of Billboard.
HYBE announced Monday (Sept. 17) that a dozen solo artists and music groups on the SM Entertainment roster will join its global fan community platform, Weverse, in September. Those artists, who have not yet been named, will move to Weverse from SM’s own fan community platform, Kwangya Club.
In addition to connecting with fans via services including Weverse Live, the 12 SM artists will also be featured on the e-commerce platform Weverse Shop, where fans can buy albums and official merchandise.
The Weverse deal derives from a platform partnership struck between HYBE, SM and Kakao Entertainment in March after HYBE fell short of its mission to purchase a controlling stake in SM. HYBE, home to K-pop superstars BTS, was blocked in its efforts by rival bidder Kakao, a South Korean tech company that owns Monsta X‘s label Starship Entertainment and Korean music streaming platform Melon. The battle ended when HYBE agreed to sell its entire SM stake to Kakao; days later, it sold 1.66 million SM shares to Kakao for 248.8 billion won ($191.8 million), amounting to 44% of its total shares in the company and increasing the stake of Kakao Corp. and its subsidiary, Kakao Entertainment, to nearly 40%. HYBE retains an 8.8% stake in SM.
Later in March, SM appointed Jang Cheol-hyuk as the company’s new CEO, succeeding outgoing CEO Lee Sung-soo, and named a new board as the company vowed to improve corporate governance and its production system, which had fallen behind rivals like HYBE in recent years and led to investor scrutiny.
Weverse claims approximately 65 million subscribers across 245 countries and regions globally.
Kakao Corp. and its subsidiary, Kakao Entertainment, increased their share of K-pop company SM Entertainment to 39.9% from 4.9% after purchasing 1.66 million shares from HYBE. That left HYBE with 54% of its shares in SM Entertainment, according to a Tuesday (March 28) regulatory filing.
HYBE sold its 1.66 million SM shares for 248.8 billion won ($191.8 million), or 150,000 won ($115.62) per share, leaving it with an 8.8% stake in SM Entertainment. HYBE had planned to sell its entire stake, the company said in a Friday filing, but it did not offload all of its shares during Kakao’s tender offer. Now that the battle for control of SM is over, HYBE’s remaining stake in SM is worth less than its purchase price. With Kakao’s tender having expired on Sunday and SM shareholders no longer able to sell at a premium, SM’s share price dropped 15% to 91,100 ($70.23) won on Monday and improved slightly to 94,300 won ($72.70) on Tuesday.
SM Entertainment, home to such K-pop acts as NCT-127 and Red Velvet, is partnering with Kakao Corp. and Kakao Entertainment to expand globally as it reorganizes following a split with its founder, Lee Soo-man. Kakao Entertainment owns K-pop group Monsta X’s label, Starship Entertainment, as well as the Korean music streaming platform Melon.
HYBE acquired about 3.5 million SM shares from Lee at 120,000 won per share, according to a Feb. 10 regulatory filing. After flirting with a campaign to take board seats and some operational control in SM, HYBE changed course and conceded to Kakao on March 13. “Proceeding with a higher tender offer [to beat Kakao’s bid] may have in turn caused a negative impact on our shareholders and we also judged it may have further overheated the market,” HYBE said in a statement at the time. The company had hoped to acquire an additional 25% stake in SM at 120,000 won ($92.51) per share, but its tender offer fizzled and increased its stake from 14.8% to just 15.8%.
Only four of the 20 stocks in Billboard’s Global Music Index were in positive territory this week: Spotify climbed 4.5% to $127.09, Tencent Music Entertainment rose 4.4% to $7.85, Warner Music Group increased 1.5% to $30.21 and Reservoir Media improved 0.2% to $6.15.
Stock markets were rattled again this week by problems in the banking sector. Following a run at Silicon Valley Bank last week, Signature Bank and First Republic faltered this week. Credit Suisse required the backing of the Swiss National Bank on Wednesday after its biggest shareholder refused to inject money to provide much-needed stability. The Dow Jones Industrial Average fell 0.1% this week after dropping 1.2% on Friday (March 17). The S&P 500 improved 1.4% on the week despite falling 1.1% on Friday.
The Global Music Index declined just 0.4% to 1,188.02 despite most stocks falling into negative territory. Spotify and Warner Music Group are two of the most valuable companies in the index. Other large companies had only small declines: Universal Music Group dropped 1.7% to 21.38 euros, SiriusXM fell 0.8% to $3.64 and Live Nation declined 0.4% to $66.36.
The biggest loser of the week was K-pop company SM Entertainment, which fell 23.5% to 113,000 won after HYBE canceled its bid to take control of the company. Last week, SM Entertainment was the Global Music Index’s biggest gainer, improving 14.4% to 147,800 won, after Kakao announced a tender offer to acquire up to a 35% stake from minority shareholders at 150,000 won per share.
The soft advertising market continued to be a problem for radio companies’ stocks. iHeartMedia dropped 12% to $4.31 and Audacy fell 12.5% to $0.14. Morgan Stanley analysts cut the price target for iHeartMedia to $5 from $8 due to “concerns regarding the long-term growth potential of broadcast radio,” according to a March 16 investor note. Year to date, iHeartMedia is down 29.7%, Cumulus Media is off 35.9% and Audacy has declined 39.1%.
SEOUL — K-pop juggernaut HYBE has withdrawn its bid to control rival agency SM Entertainment and has instead decided to collaborate with SM as well as rival bidder Kakao, marking a sudden détente. Announced early Sunday, the resolution paves the way for K-pop agencies to not only bury the hatchet but also continue their push to monetize fandom with idol-related online content.
“Proceeding with a higher tender offer [to beat Kakao’s bid] may have in turn caused a negative impact on our shareholders and we also judged it may have further overheated the market,” HYBE said in a statement. The agency of boy band BTS had secured about 15% of SM, a former market leader, mostly by acquiring shares from SM founder Lee Soo-man, who was recently pushed out from the agency. A previous tender offer to increase HYBE’s stake in SM didn’t move the needle and a counteroffer by Kakao remains outstanding until March 26.
On Monday, the market reacted by dragging SM stock down more than 23% to 113,000 Korean won, making Kakao’s current offer at 150,000 won more attractive. A HYBE representative said Monday it has not decided whether to sell the SM shares. He added that it was studying possible avenues for collaboration with SM and/or Kakao but declined to comment further. HYBE and Kakao shares have jumped 3.21% and 4.65%, respectively.
SM, which has played a key role in K-pop’s popularity and overseas expansion, has resisted HYBE’s acquisition, slamming it as “anticompetitive.” The two agencies in recent years have dominated the charts, together accounting for nearly half of all albums sold in 2022, according to Korean chart company Circle Chart. But despite its success, shareholders have been calling for changes to the Lee-controlled single-pipeline structure, as rival agencies grew larger by delegating creative direction to mostly autonomous teams. Lee was also being paid millions of dollars a year in producer fees, though he held no managerial position there, an arrangement that shareholders have scrutinized in recent years.
In a drive for reform, SM’s management in February said it would issue new shares to be sold to Kakao as part of a wide-ranging partnership. Lee, then-the biggest shareholder, protested but management overrode him. Lee then offloaded most of his shares to HYBE, which in turn tried to up its stake with a tender offer. Lee successfully challenged the Kakao deal in court, prompting the latter to issue a higher counteroffer.
“Kakao vows to guarantee operational independence at SM, respecting its strongest asset and impetus, the employees, artists and fans,” said Kakao chief investment officer Bae Jae-hyun in a statement on Sunday. Bae added that Kakao and SM would “create new synergies, based on SM Entertainment’s global IP and production system as well as Kakao’s IT expertise and IP value-chain business capacity.”
HYBE, SM and other rivals have in recent years pushed proprietary platforms like Weverse and Beyond Live to foster online fan communities for all fan activities, free or for-pay. Kakao’s platform and search-engine rival Naver in 2017 also inked a deal with YG Entertainment, home to girl group Blackpink, to push YG artists’ content.
SM did not return calls for comment.
The battle for control of K-pop company SM Entertainment has been a boon for its shareholders. SM’s stock rose 14.4% this week to 147,800 won ($111.95) after Kakao launched a tender offer to seek a 35% stake at 150,000 won ($113.62) per share. Korea’s largest music company, HYBE, previously sought to acquire up to 40% of SM shares at 120,000 won ($90.89) per share. Its tender offer largely failed, however, with HYBE’s stake increasing just 1% — from 14.8% to 15.8% — as investors held out for a better offer.
SM was one of just three stocks in the 20-company Billboard Global Music Index to be in positive territory this week. Abu Dhabi-based music streamer Anghami rose 5.5% and German concert promoter CTS Event rose 1.5%. The overall Global Music Index declined 3.9% to 1,192.56.
Shares of Spotify declined 1.7% to $121.67 this week after it unveiled a slew of new product features at its annual StreamOn event on Wednesday. The company announced it has already surpassed the 500 million monthly active user target for the first quarter with an entire month remaining.
In the U.S., the Dow index fell 1.1% and the S&P 500 declined 1.5%. The big news in the financial markets on Friday (March 10) was the closure of Silicon Valley Bank, the country’s 18th largest bank with assets of nearly $213 billion, according to the Federal Financial Institutions Examination Council; it was a major player amongst the region’s tech companies and venture capital firms. It’s the second-biggest bank failure in U.S. history behind Washington Mutual at the height of the 2007-08 financial crisis. The Federal Deposit Insurance Corporation was appointed SVB’s receiver on Friday and will give insured depositors access to their funds no later than Monday.
The U.K.’s FTSE 100 Index declined 1.7%, Japan’s Nikkei 225 index declined 1.7% and Korea’s KOSPI index declined 1.0%.
