Want To Buy Shares In Big Hit Entertainment? Here’s Everything You Need To Know
Let’s face it—the stock market is confusing. However, since Big Hit Entertainment announced that its IPO (initial public offering) is set to launch next month, ARMYs and MOAs everywhere are more interested in stocks and shares than ever. Many international fans are even considering investing a little spare cash into the highly profitable company. If you’re one of them and you’re feeling confused about the whole ordeal, here’s everything you need to know about buying shares in BTS and TXT‘s agency.
The requirements
The first question on many international fans’ minds is whether they’ll be able to invest in the agency at all. Thankfully, the answer is yes. You don’t need to be Korean to buy shares in Big Hit Entertainment, and there’s no age restriction on investing. All ARMYs and MOAs are eligible—the only requirement is that you follow the process below.
The price
Of course, while everyone is eligible to invest, not everyone can afford to. Given that the company’s valuation is higher than SM Entertainment, JYP Entertainment, and YG Entertainment combined, Big Hit Entertainment shares won’t come cheap. The final pricing won’t be decided until September 28, but expect to spend ₩105,000 to ₩135,000 KRW (around $90 to $115 USD) per share.
There’s no minimum requirement, so you’re free to buy just one share if that’s all you can afford. Of course, serious investors often buy in increments of 500 to 1,000 shares.
The benefits
Buying shares in Big Hit Entertainment could have benefits for you and your favorite group. The agency is one of the fastest growing and highest earning around, almost doubling their sales between 2018 and 2019. And, even though COVID-19 has had seriously detrimental effects on many K-Pop companies this year, Big Hit Entertainment still increased sales by 50% in the first half of 2020. If the value of the company increases, so does the value of your stocks, which you can later sell to turn a profit.
As for the benefits to BTS and TXT, Big Hit Entertainment will likely use its IPO to raise funds to expand the company. Offering around 7.13 million shares, the agency is predicted to raise its value to up to ₩4.8 trillion won ($4 billion USD) according to analysts. That will give them a lot of money to re-invest into their artists.
The risks
Buying shares is always a risk, but when it comes to Big Hit Entertainment, the major thing rookiecinvestors need to keep in mind is that the company is currently heavily reliant on just one artist. In the first half of 2020, BTS’s sales accounted for 87.7% of Big Hit Entertainment’s total sales.
However, the company is currently diversifying its assets to mitigate this. After acquiring Source Music and Pledis Entertainment, Big Hit Entertainment is in talks to acquire Zico‘s agency KOZ Entertainment. They’re also expected to debut new girl and boy groups over the coming years.
The process
The process of buying shares in Big Hit Entertainment as an international fan actually isn’t too complicated. However, the main thing to note is that the process is different depending on where you live.
How to buy Big Hit Entertainment shares if you live in Korea
If you’re a foreigner living in Korea right now (for example, as a student or on a working holiday), you can put in a preorder deposit for Big Hit Entertainment shares on October 5 and 6. The process is as follows:
- Open a personal securities account (also known as a brokerage account). This is where your stock assets will be held. To open an account, you’ll need to visit your local brokerage office in person with your ARC (alien registration card) and your Korean bankbook.
- Open an account with an underwriter. This is where you can buy and sell stocks. The four underwriters offering Big Hit Entertainment preorder shares are Mirae Asset Daewoo, NH Investment & Securities, Korea Investment & Securities, and Kiwoom Securities.
- Place the order. Note that when you preorder shares, you’ll need to pay 50% of the price up front.
- Wait for the outcome. As with everything BTS and TXT-related, expect a lot of competition for Big Hit Entertainment shares. If you order 10 shares, for example, but there are 10 times as many orders as shares, you’ll only receive 1 share.
How to buy Big Hit Entertainment shares if you live abroad
If, like most international fans, you’re not living in Korea right now, don’t worry. You can still buy shares—you just can’t participate in the preorder. Here’s what you need to do:
- Open a personal securities account (also known as a brokerage account) in advance. This is where your stock assets will be held. Depending on where you live, you’ll need to either visit your local brokerage office or apply online.
- Wait for the IPO. Big Hit Entertainment is set to make its debut on Korean stock exchange KOSPI in October, but the exact date has not yet been set.
- Buy your shares. Once Big Hit Entertainment goes public, you’ll be able to submit an order for shares through your broker. Note that you’ll likely incur transaction fees on top of the share price; these fees will differ between brokers.
