YG Entertainment faces increasingly deep concerns from shareholders when its stock price plummets on the first trading day of 2024 because G-Dragon and BlackPink are gradually ‘flying high’.
For YG Entertainment, the current period is very painful, when the members of BlackPink have terminated their individual exclusive contracts. Even Ahyeon – the key Korean member of the rookie girl group BABYMONSTER – also left the lineup despite not having debuted long ago.
Or G-Dragon – one of YG’s golden egg-laying hens – also decided not to renew the contract with YG, but chose another company to join.
Where will YG go without BlackPink and G-Dragon?
According to the Korean exchange on January 3, YG closed at 47,550 won, down 6.58%, equivalent to 3,350 won.
Although the group contract was renewed, BlackPink’s individual contract was not signed, but the Black Pink girls chose to go solo.
It can be said that among the four major entertainment companies in Korea, YG is the only company to see a significant decrease in stock value, directly related to BlackPink .
Right before the year-end holidays, YG made a shocking statement: “We have agreed not to renew the individual exclusive contracts for all 4 BlackPink members.”
Therefore, BlackPink members will continue group activities under YG management, while pursuing individual activities under the management of their respective management companies.
Currently, Jennie and Jisoo have signaled independent career paths. In November 2023, Jennie established her own brand ‘OA’ (Odd Atelier).
Jisoo in particular plans to continue working solo under Biomom Company, a functional food brand for infants founded by her biological brother Kim Jung Hun. The company will expand into the entertainment field with a label called Blissoo.
It was also because BlackPink’s personal contract was not renewed, plus G-Dragon’s departure that had a major impact on YG’s shares, causing investors to bounce back and forth like on fire.
BlackPink and G-Dragon leaving has had a big impact on YG’s stocks
Analyst Kim Hye Young said: “With the cancellation of individual contracts of BlackPink members, there is no other choice but to reflect the gap in revenue. The direction of YG stock price will depend on the success of BABYMONSTER, which is currently YG’s main growth driver.”
Analyst Im Su Jin also commented: “The market expected at least one or two BlackPink members to renew their contracts, but even that did not happen. This has caused frustration.”
Analyst Yoo Sung Man commented: “When BlackPink leaves, the direction of YG stock price will be decided by TREASURE and BABYMONSTER, but currently there are no clear signs of upward momentum.”
As BlackPink members embark on their own paths, the burden on TREASURE and BABYMONSTER increases. Special attention is focused on BABYMONSTER, which is scheduled to release its second single on February 1.
Because of this, the question is whether BABYMONSTER has enough influence to achieve achievements comparable to BlackPink.
The initial fandom has formed with about 60,000 fans, considered satisfied within the first month of its launch, having sold over 1 million albums similar to LE SSERAFIM.
BABYMONSTER is the group that is expected to replace BlackPink and pull YG’s stock. However, this seems impossible
However, the absence of a core member remains a significant variable. Ahyeon, nicknamed ‘Little Jennie’, was already a popular member of Korea even before BABYMONSTER debuted, making her a potential catalyst for YG’s stock.
However, in the end Ahyeon left BABYMONSTER due to health reasons, the time of Ahyeon’s return is still uncertain.
YG shareholders also expressed frustration. Despite lingering speculation about BlackPink’s contract extension affecting stock price movements, uncertainty appears to have increased, rather than decreased, in the face of continued bad news.
Some investors even asserted: “The announcement of BlackPink’s group contract renewal was made after the deadline, and the non-renewal of individual contracts was revealed during the year-end holiday. BABYMONSTER’s premiere was also delayed by two months. This seems like a way to manipulate stocks.”
Ahyeon – the key Korean member of the rookie girl group BABYMONSTER – also left the lineup, causing the rookie group to suffer a big loss.
Some investors see the current situation as a buying opportunity. One investor commented: “Even though the stock price has dropped from 80,000 to the 50,000 KRW mark, it’s shocking that it still needs to drop further. Despite facing adversity head-on, it held up better than expected. The lower the stock price, the more I consider buying.”
In fact, institutional and foreign investors sold a total of 11.7 billion won and 6.3 billion won in stocks, while individual investors alone were buyers during these sell-offs. .
An industry insider advised: “Companies with a high proportion of new recruits such as HYBE and SM, as well as those with a well-organized management structure for contract renewals, will be in a relative position. better to hedge against stock fluctuations.”
