HYBE's clash with ADOR results in $619M market cap loss
South Korean entertainment powerhouse HYBE, globally recognized for managing K-pop group BTS, is currently wrestling with a significant 850B KRW ($619M) drop in stock value. This financial downturn is linked to an internal conflict involving ADOR CEO Min Hee-jin, leading to investor apprehension and market instability. The core of the problem revolves around allegations of an attempted takeover and irregularities within ADOR, a subsidiary of HYBE.
Instability unlikely to leave impact on HYBE's long-term financial performance
Per Korea JoongAng Daily, HYBE suffered a substantial market capitalization loss of over $619M within two days. Notably, ADOR is predominantly owned by HYBE, holding an 80% stake, with Min owning 18%. Analysts speculate that the recent conflict is unlikely to have a substantial impact on HYBE's long-term financial performance, citing ADOR's relatively modest contribution to the parent company's overall revenue.
Disagreement between HYBE and Min: Explained
The disagreement between HYBE and Min has escalated, with allegations of an internal coup within ADOR aimed at snatching control from HYBE. In response to these claims, HYBE launched an audit into ADOR's operations on Monday and demanded Min's resignation. Counteracting these allegations, Min accused HYBE of replicating ADOR's creative ideas. Reports suggest that Min and the management team at ADOR sought external advice for a takeover strategy from HYBE.
Min accused HYBE of plagiarizing Newjeans's concept for ILLIT
In a countermove to the allegations, Min accused BELIFT Lab, a HYBE subsidiary, of plagiarizing NewJeans's concept for their newest girl group ILLIT—which debuted in March. She criticized HYBE's profit-driven approach, alleging they prioritize replicating successful cultural content over originality. Min issued a statement affirming ADOR's commitment to protecting NewJeans and promoting the healthy growth of the music and culture industry.
The future of HYBE and the K-pop industry
The growing tension between HYBE and ADOR has ignited worries about the future of their artists and the integrity of the K-pop industry as a whole. With potential legal battles looming and reputations at stake, the fallout from this dispute could have far-reaching implications. Despite these challenges, there are positive indicators for HYBE's future, including anticipated revenue boosts from BTS members Jin and J-Hope completing their mandatory military service this year.