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The share value of YG Entertainment dropped even more after girl group BLACKPINK declined to sign on for more solo projects, breaking the 52-week low on January 10. YG Entertainment wrapped up at the exact same value as it did on the preceding trading day—44,800 won—on this particular day on the KOSDAQ market.
Nevertheless, throughout the day, the stock price displayed a lethargic pattern, breaching the 52-week low again after starting at 44,050 won, downward 1.67% from the day before. On January 11, 2024, the price stayed unchanged at the outset of the trading day and concluded at 45,550 won, 1.67% upward from the previous trading day's closing price.
BLACKPINK and G-Dragon's exit has allegedly shaken the foundation of YG Entertainment
According to the report by the South Korean media outlet Heral Economy, analyst Lim Soo-jin of Daishin Securities stated in an updated report that the album release envisioned by BABYMONSTER, which was supposed to happen in the latter half of this year, had to be postponed subsequently.
This was due to the news that BLACKPINK's individual activity contracts were terminated. This adds even more fuel to the continuing downturn in stock prices. A negative revision of revenue expectations is necessary, given the reduction of the yearly outlook for BLACKPINK and BABYMONSTER's activities this year.
Regarding BLACKPINK, YG Entertainment announced on December 29, 2023, that the two sides had decided not to go ahead with independent solo partnerships for individual activities. Additionally, YG Entertainment reiterates that BLACKPINK's collective efforts have the full support of the company and extends genuine aid for each member's individual endeavors.
BLACKPINK's stock price appears to be being held back by YG Entertainment's decision to just extend the binding agreement for team activities rather than signing a new deal for individual activities.
On January 11, 2024, NH Investment & Securities cut its projected price for the shares from 87,000 won to 70,000 won, citing YG Entertainment's continual postponements in artists' activities. The organization also highlighted the artist management agency's recent inability to sign new contracts for BLACKPINK's solo projects as a reason for the erosion of confidence among investors. The investing view remained at "buy," nonetheless.
Herald Economy reported on January 11, 2024, that according to researcher Lee Hwa-jeong, dissatisfaction over BLACKPINK's contract extension and G-Dragon's exit from the company has made investors less optimistic, and frequent setbacks in artists' activities have undermined trust. As a result, NH Investment & Securities reduced the goal PER from 30x to 24x times profits.
Lee Hwa-jeong listed other risk considerations that investors in YG Entertainment should consider, such as the inability to get a significant lineup of musicians owing to a new group's box office failure, the inability to extend contracts with key performers, and the advent of malicious obstacles.
"The failure to secure a meaningful lineup of artists due to the box office failure of a new group, and the failure to renew contracts with major artists and the occurrence of malicious issues." (as reported by Herald Economy)
It is anticipated that the operational profit in the final four months of last year would be 7.8 billion won, which is 50% less than what the market had predicted.
While BABYMONSTER and BLACKPINK member Jennie's new songs exhibited encouraging streaming trends, Lee Hwa-jeong of Herald Economy stated that the lack of album releases limited their performance influence.
Nevertheless, the present stock price has dropped to the point where any potential for BLACKPINK's future operations as solo artists under YG Entertainment has completely been shut out. Members of BLACKPINK understand that group activities must go on, and they will carry out their solo activities with separate representations without interfering with the group's operations.
BLACKPINK Jennie launching her own label & Jisoo signing with her brother's company caused YG Entertainment's stock to drop
Meanwhile, BLACKPINK member Jennie launched her own company ODD ATELIER (OA), while Jisoo is reported to have signed in with her brother's company BLISSOO. The other two BLACKPINK members Rosé and Lisa are yet to confirm regarding which agency they have signed with.
According to a report by the South Korean media site E-Today, as of 9:40 am KST on December 26, 2023, YG Entertainment saw a sharp decline of 3.94% (2,050 won) in its share value from the previous trading day. Industry insiders state that the company's share worth dropped due to BLACKPINK members terminating their solo contracts with the agency and Jennie launching her own company.
It was already established that YG Entertainment is not a partner of BLACKPINK for their solo endeavors. Jisoo is supposedly going to be involved with Biomom Co., which is being handled by her brother Kim Jung-hun.
Many fans observed that BLISSOO had updated BIOMOM Co. with a new employment requirement that included a photo of BLACKPINK's Jisoo under the recruiting details. Jisoo's brother is reportedly discussing of rebranding Biomom's Entertainment division as BLISSOO.
Fans are eagerly waiting for Lisa and Rosé to reveal their future plans and whether or not they will start their own label similar to their bandmate Jennie.
