HYBE stock plummets after BTS announces temporary break

BTS arrives at the 64th Annual Grammy Awards in Las Vegas on April 3. [AP/YONHAP]

Shares of BTS's entertainment agency fell more than 25 percent on Wednesday after the boy band announced it would take a temporary break from group activities.

HYBE shares dropped by as much as 28 percent during intra trading to 139,000 won ($108) each, the lowest since it went public at 135,000 won a share in October 2020.

The seven-member group announced its decision to temporarily halt group activities to focus on solo projects in a video uploaded on YouTube on Tuesday.

HYBE stock once reached 421,500 won at its peak in November 2021. The shares are now down more than 60 percent from that peak. The Fed’s FOMC meeting that ends today is seen to have further driven down the price.

“The temporary break is likely an indirect way of expressing [the need to] join the military,” said Lee Ki-hun, an analyst at Hana Finaicial Investment. “The 2022 earnings can be partly offset as there is a possibility the members may release at least one solo album this year if they join the army in 2023.”

Lee added there won’t be change to his 360,000-won target price on HYBE until any official announcements are made, but warned investors to make decisions considering the possible inactive period of the members in coming years.

HYBE is scheduled to debut around seven to eight new groups over the next two years.

HYBE is estimated to report 316 billion won in operating profit in 2022, according to Lee sun-hwa, an analyst at KB Securities, but that may decline from BTS’ break on group activities.

BTS members are expected to announce their plans to begin their mandatory military service next week, according to Lee.

BY JIN MIN-JI [jin.minji@joongang.co.kr]