According to a Monday regulatory filing, Big Hit Entertainment’s Initial Public Offering (IPO) has been 1,117 times oversubscribed and has been set around $115 per share, the top end of the pricing range. Big Hit will raise approximately $820 million from the offering, valuing the company at $4.1 Billion.
Big Hit Entertainment is a South-Korean enterprise founded in 2005. Big Hit is the management firm of BTS, a K-pop music group with international success and supporters worldwide called “ARMY”, who are looking forward to the IPO with some of them buying shares of their favorite company.
Big Hit Entertainment is strategically capitalizing on BTS’s success and the liquidity of the Korean Stock Market. The government’s stimulus efforts have resulted in a surge, with the KOSPI Index being 58% up since March lows. Big Hit’s IPO will be South Korea's largest stock offering since July 2017, according to data compiled by Dealogic. Shares are expected to start trading on the 15th of October.
The trend of companies taking advantage of low-interest rates and additional liquidity in the public markets to issue debt or shares respectively has been getting stronger worldwide. The question is how long is it until central banks turn the tap off cheap money and retail investors re-consider the valuations and quality of companies comprising their investment portfolios?