Boy band BTS rattles K-pop shares by announcing temporary break

K-pop boy band BTS has announced that it will take a break to pursue solo projects, sending shares in Hybe, their South Korea entertainment agency, plunging by a record amount.

Hybe’s stock dropped 28 per cent on Wednesday, wiping out about $1.7bn in market value. The shares are headed for their lowest close since the company’s initial public offering in October 2020. Other entertainment shares also lost ground on the news, with YG Entertainment down 7.1 per cent.

BTS frontman RM and his fellow band members said at a group dinner on Tuesday that the group needed a break. “The problem with K-pop and the whole idol system is that they don’t give you time to mature,” RM said in a video posted on YouTube.

The band has become a global sensation, spearheading unprecedented popularity in South Korean pop music with catchy tunes, synchronised dance routines and social media savvy.

The group has released many hit songs including “Dynamite” and “Butter” since their debut in June 2013. They were the first K-pop act to top the Billboard album charts in 2018 and the first Asian band named “Artists of the Year” at the American Music Awards last year.

But uncertainty over the group’s future has grown, driving Hybe shares down almost 60 per cent this year as the group’s members faced the prospect of military conscription. Its oldest member Jin, 29, is expected to sign up this year unless a related law is revised to allow an exemption.

A bill is pending that would allow globally recognised pop artists to be exempted from mandatory conscription because of their contribution to raising the country’s standing abroad. But parliament is unlikely to pass the bill any time soon despite the advocacy of a government minister, who argued that enlisting BTS would be a “cultural loss for mankind”.

The news of the hiatus came soon after K-pop fans cheered the return of BTS to the global music scene with large-scale concerts in the US as coronavirus restrictions were eased.

Hybe relies heavily on BTS, which generates almost 90 per cent of its revenues. But Lee Hye-in, an analyst at Yuanta Securities, warned that Hybe’s revenue this year was likely to be a quarter lower than previous estimates, while its profit would probably be a third lower without BTS concerts.

“Revising down the company’s earnings forecasts for 2022/23 seems inevitable if it confirms that BTS will not hold concerts in the second half and next year,” she said in a research note.