On March 13th, YG Entertainment’s stock value dropped to 48,000 Won (approximately $42.63) from a stable value of around 50,000 Won.
At the time when YG Entertainment was performing well, analysts claimed that their stock price will soar up to around 80,000 Won. Breaking many people’s expectations, YG Entertainment’s stock was traded at around 109,000 Won (approximately $96.79) in January. However, there weren’t any increases after this time.
Not too long ago, YG Entertainment was the hottest blue chip in the stock market. YG Entertainment, the company of idol groups Big Bang and 2NE1, has been valued as one of the top entertainment companies along with SM Entertainment. As there were rumors about the company’s growth, the entertainment company started to become traded at a high value. However, during the past week, the stock price of YG started to drop continuously.
The main reason asserted by analysts is that Big Bang’s album activities have not been as good as before.
Big Bang has been YG Entertainment’s main pride and source of revenue. However, member Daesung was affiliated with a car accident last May and G-Dragon disappointed many fans with the marijuana incident in October. Although both members have been proven not guilty, it is true that both members brought a lot of disappointment and negative influence to the public. In addition, both members started their promotional activities in only four months without a long-enough time for repentance and self-discipline. Other Korean celebrities like MC Mong, who tried to avoid military service through teeth removal, has paused his celebrity activities for over a year. Also, actor Kim Sung Min, who also was affiliated with smoking marijuana, has paused his activities and has been repenting until now. Compared to these celebrities, G-Dragon and Daesung’s time for repentance seems to be too short.
After a severe damage to their image, Big Bang’s popularity seems to be declining as well. Even after a month has passed since their album release, Big Bang hasn’t been able to sell over 100,000 albums (currently around 60,000). However in 2011, Big Bang sold over 100,000 albums in only nine days.
Another reason for the drop in stock price seems to be YG Entertainment’s increased expenses used on the promotional activities of Big Bang. YG decided to utilize Naver’s website and TV advertisements to promote Big Bang’s album. According to some rumors, it cost around $3 billion won just to promote through Naver, one of Korea’s main portal websites.
Furthermore, another requirement for a singer to gain popularity is the relationship with broadcasting companies. However, YG Entertainment seems to have a bad relationship with Korea’s main broadcasting companies, except for SBS. For example, KBS even claimed that Big Bang and 2NE1 cannot access their company nor appear on their channel. Also, Big Bang was heavily criticized for their short time for repentance in KBS’s ‘Entertainment Relay‘. Their bad relationships with Korea’s main channels could have a bad effect on YG Entertainment’s upcoming idol groups or singers.
Currently, analysts believe that YG Entertainment stocks are overvalued due to the numerous factors hurting the company’s image. Big Bang is still only in the beginning phase of their promotional activities so many stockholders are hoping to see the entertainment company get back on track. It seems that although many fans have been supporting Big Bang’s comeback in the industry, the public is still skeptical about their short repentance and their bad influence to society as an ‘idol’ group, ultimately causing the stock prices to decline rapidly. Certainly, YG Entertainment has been going through hard times with increasing costs and efforts to rebuild their public image. One thing for certain though, is that the musicians of YG Entertainment are still top-notch and the company produces some the best K-Pop artists in the country. Hopefully soon enough, YG Entertainment will be able to gain back their lost value through the fantastic music they bring to the industry.
Source + Photo: Nate
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