Thu, 15 Oct 2020 - 03:20 GMT
FILE PHOTO: Members of South Korean boy band BTS pose in Nagoya, Japan, December 4, 2019. REUTERS/Kim Kyung-Hoon//File Photo
SEOUL (Reuters) - Shares in Big Hit Entertainment defied the pre-listing hype to dip on their first day of trade on Thursday, giving the management label of South Korean superstar K-pop group BTS a market valuation of 8.7 trillion won ($7.61 billion).
Big Hit, which relies heavily on the boy band for revenue, doubled its initial public offering price to debut at 270,000 won per share, for a 9.6 trillion won valuation. Shares surged by as much as 30% in early trade before dropping back.
Analysts said the closing share price of 258,000 won, still around 90% above the IPO price, should be viewed as a more reasonable price based on fundamentals, rather than a sign of listing failure.
“The closing price is already around analysts’ average target price for 2022, based on estimations of profit increases,” said eBest Investment & Securities analyst Jina An.