BTS 'hiatus' storm hits HYBE shares as agency denies break
HYBE plummeted 25 percent on Wednesday after BTS suggested in a video released Tuesday night that it would take a temporary break from group activities to focus on solo albums.
Media globally reported that BTS would be taking a "hiatus," but that characterization was challenged by HYBE, which manages the band. It argues that the English subtitles were mistranslated.
In a video uploaded on the BTS YouTube channel, the band said it will concentrate on individual projects rather than on BTS projects. None of those participating said it was a break, but they said that they had felt "lost" and needed the time to look back on themselves.
Titled "2022 The Real BTS Dinner Party," the 60-minute clip was a part of the band's annual "Festa" anniversary event, five days after "Proof" was released last Friday.
"The problem with K-pop and the whole idol system is that it doesn't give you the time to mature," RM said.
"You have to keep producing music and keep doing something. But I get up in the morning and get makeup done, and there's no time left for growth. At some point, I didn't know who we were as a team anymore. I had no idea where I or the team were heading."
The members will be focusing on releasing solo albums. The first member to roll out an album will be J-Hope.
"I think that change is what we need right now," said J-Hope. "It's important for BTS to start our second chapter."
HYBE said in a statement that this is not the band taking a hiatus.
"The team never said it was taking a break," a spokesperson told the Korea JoongAng Daily. "They made the announcement because BTS had always released albums as a group and they didn't want to worry or startle the fans when individual releases start coming out."
BTS will appear on local television and film commercials together, but the agency said it cannot confirm whether the band will be releasing any albums or holding concerts together.
A date for J-Hope's album has also not been set yet, HYBE said. He is set to perform solo at Lollapalooza in July.
Fans responded with emotion, supporting the band on its decision.
"We have and will always support you in whatever you do," read a comment on YouTube. "We hope you rest as much as you need and come back when you can fully express yourself as BTS."
"They're humans, they deserve a break," read another. "We are lucky to have such an honest discussion before us. It actually pains me to hear what they're saying and how much they've been through."
Despite the agency's explanation and fan reaction, market watchers say this move spells a virtual halt for the group — especially because Jin may not be able to postpone his military duty any longer.
"The agency can't say that the band is taking a break because that would spell disaster on their stock price," said an insider at an entertainment agency, who wished to remain anonymous. "But if one member starts his military duty, it takes too long for all members to finish and come together as the whole group.
HYBE stock fell to its lowest in 20 months.
Shares closed at 145,000 won ($112) Wednesday, trading at a low of 139,000 won during trading. It was the lowest since Oct. 30, 2020 when stock closed at 142,000 won two weeks after it went public that month.
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 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," said Lee Ki-hun, an analyst at Hana Financial Investment.
Lee added there won't be a change to his 360,000-won target price on HYBE until any 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.
"It is likely to be subject to a downward revision in light of the indefinite hiatus by BTS, as well as uncertainties regarding the band's world tour," Lee said.
BTS members are expected to announce their plans to begin their mandatory military service next week, according to Lee.
BY YOON SO-YEON, JIN MIN-JI, LEE JI-AN [email@example.com]