Fans of boy band BTS join swarm of Ants chasing S.Korea's hit IPO
25/09/2020 02:35
* Bank of Korea watching short-term money market impact
* Huge oversubscription expected for IPO of BTS's label
* Big Hit seeking to raise $826 mln in IPO scheduled for
mid-Oct
By Cynthia Kim and Minwoo Park
SEOUL, Sept 25 (Reuters) - Kim Eun-hee wants to complete her
collection of memorabilia of Korean boy band BTS by bidding more
than $120,000 to buy shares in the group's music label Big Hit
Entertainment in South Korea's hottest IPO, which could even
shake money-markets.
Fervour is building among die-hard South Korean BTS fans to
secure at least one share of the K-pop band's label as order
books for next month's listing opened this week.
"I'm adding my support to BTS by buying shares; it will add
onto my collection here," the 51 year-old said in the BTS-themed
cafe she runs in Seoul, which is filled with BTS merchandise,
from a 47-inch wide photo of band member Jin to toys designed by
the group.
Big Hit Entertainment is betting that going public will be a
smash hit riding on the success of the seven-member band, which
has become the first South Korean group to reach No.1 on the
U.S. Billboard Hot 100 singles chart with catchy song
"Dynamite." urn:newsml:reuters.com:*:nL4N2FZ1R3
There is already insatiable demand for new share listings
from South Korean retail investors - known as "Ants" - because
government stimulus efforts to bolster the economy after the
coronavirus crisis has flooded markets with cash. urn:newsml:reuters.com:*:nL4N2FR326
Analysts predict Big Hit will take the crown as South
Korea's hottest initial public offering, one that the central
bank is watching closely as a massive oversubscription for
shares could send ripples through short-term money markets.
"Gross bids from retail investors could hit 100 trillion won
($85.23 billion), its the biggest fish of the year," said Hwang
Hyun-jun, an analyst at DB Financial Investment. "Liquidity
party is still on, and the timing couldn't be better as BTS has
just topped the Billboard."
ARMY OF ANTS
Big Hit is looking to raise as much as 962.6 billion won
($825.9 million) in the IPO that is set to be South Korea's
largest in three years. urn:newsml:reuters.com:*:nL4N2FZ20Z
The offering of about 7.1 million new shares is currently
pegged at 105,000 - 135,000 won per share. The final price is
may be announced early next week or late Friday afternoon.
But the stock's valuation is less of an issue for Kim and
other BTS fans - who are called ARMY.
Kim and four other fans bidding for shares said they would
be lucky to pick up just one share even if they place bids for
tens of thousands of dollars because of the expected strong
retail demand. urn:newsml:reuters.com:*:nL4N2DT4PK
South Korea's Ants have been piling in to one IPO after
another this year.
The September listing of Kakao Games 293490.KQ attracted
58 trillion won in bids from retail investors alone on orders of
about 1,500 times the number of shares offered, setting a
record. urn:newsml:reuters.com:*:nL4N2G7033 urn:newsml:reuters.com:*:nL4N2E902Q
Following the flood of orders for Kakao Games' IPO, the
overnight repo rate dipped to a three-month low of 0.38% on
Sept. 3 as brokerages placed hundreds of billions of won in
preorder deposits from retail bidders into the market, data from
the Korea Securities Depository shows.
A Bank of Korea official said the central bank is currently
"monitoring short-term money market as an inflow of funds is
expected in the IPO market."
The Big Hit listing is also expected to make the seven BTS
members multimillionaires, as CEO Bang Si-hyuk in August gave
them 68,385 shares each. urn:newsml:reuters.com:*:nL4N2G025R
'DON'T KNOW MUCH ABOUT VALUATION'
Some BTS fans plan to buy Big Hit shares for themselves on
band members' birthdays or other anniversaries.
"I can see myself buying one on V's birthday," said Alice
Park, referring to one of the band members. Park, a 28-year old
banker, is taking out a personal loan of "a couple of hundred
grand" to make a bid.
Fans loading up on shares of music labels is not new to the
K-pop scene.
Local media has reported that back in 2008, a fan of Girls
Generation, an all-female group, bought shares in its label SM
Entertainment 041510.KQ for 22.5 million won and watched them
rise more than 2,700% in three years.
Kim Seo-hyeon, a 12-year old BTS fan in Seoul, has asked her
parents to buy her one share so she could meet the members of
the band at a future shareholders meeting.
"I don't know about stock valuations. I know my oppas (BTS
band members) are rich but I hope me buying shares make them
even richer, so that they can buy something nice to wear, that
would make me happy."
($1 = 1,173.3500 won)
(Reporting by Cynthia Kim, Yena Park, Seunggyu Lim, Minwoo Park
and Dae-woung Kim. Editing by Jane Merriman)
((Cynthia.Kim@thomsonreuters.com; 822 3704 5655; Reuters
Messaging: cynthia.kim.thomsonreuters.com@reuters.net))