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HYBE Stakes Its Claim with Stock Purchase

HYBE Stakes Its Claim with Stock Purchase

HYBE has recently acquired a stake in rival Korean company SM Entertainment, creating a shift in the K-pop industry. Variety reported that HYBE purchased 422.8 billion Shares, or an 18.8% stake of SM Entertainment. 

The deal makes HYBE the largest shareholder of its once rival SM Entertainment. This move helps HYBE continue its mission to expand worldwide, as well as expand its other entertainment, lifestyle and culture-related platforms.

HYBE Global Team

HYBE’s global team, composed of Chairman Bang Si-Hyuk, CEO Park Jiwon and Scooter Braun guided the deal to acquire former Chief Producer Lee Soo-Man’s shares in SM Entertainment.

SM is home to such acts as:

  • aespa 
  • BoA 
  • TVXQ 
  • Girls Generation 
  • Shinee 
  • EXO 
  • Super Junior 
  • NCT 127
Bang Si-Hyuk

HYBE Chairman Bang Si-Hyuk Said of the deal: “HYBE fully agrees with former Chief Producer Lee’s strategic initiatives including metaverse, a multi-label system, and the sustainable vision campaign. … Leveraging our capabilities and resources, HYBE will further strengthen the presence of K-pop in the global stage.”

This deal will further bolster HYBE’s presence in the US music market, according to Sunhwa Lee, an internet and entertainment analyst at KB Securities. In her report, she stated that it was not just about K-pop for them anymore but rather their ambition of “developing new global artists across multiple genres”. 

Recent Deals

This deal falls in line with another recent deal HYBE pulled off in acquiring American Hip Hop label ‘QC’. Led by co-founders Pierre “P” Thomas and Kevin “Coach K” Lee. The Atlanta-based label covers, sports, film, and television. 

Quality Control(QC) is home to artist:

  • Lil Baby
  • Lil Yachty
  • City Girls
  • Migos 

QC was acquired by HYBE America CEO Scooter Braun for a remarkable $320 million worth of stock & cash – making it one of the most lucrative deals ever seen for an indie.

Although the HYBE SM deal on most accounts seems to be a win-win, according to Reuters HYBE’s acquisition of shares from Lee Soo Man has been met with disapproval by SM Entertainment executives.

In October 2022, SM decided to part ways with Like Planning–a private company owned by Lee–due to suspicions of the agency paying out billions of South Korean won each year.

SM Entertainment recently revealed their new SM 3.0 growth strategy, which will involve founding five production hubs and multiple music labels both domestically and internationally to optimize the process of artist creation.

Lee Sung Soo and Tak Young Jun, the co-CEOs at the company, announced their upcoming plans through a YouTube video. The SM 3.0 strategy is seen as an attempt to reduce the company’s creative dependence on Lee Soo-man.

HYBE’s current market cap stands at $6.6 billion; SM Entertainment’s stands at $1.85 billion.


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