Heads of JYP, YG bolster confidence with major stock purchases
Entertainment stocks down but not out
In the midst of a sharp decline in the stock prices of entertainment companies, founders of JYP and YG Entertainment have demonstrated their confidence in their firms' growth prospects by acquiring shares in their respective companies.
On Tuesday, YG Entertainment announced that its founder, Yang Hyun-suk, began purchasing 461,940 shares of the K-pop agency on Jan. 18. The total amount spent was approximately 20 billion won ($14.9 million), which increased Yang's ownership stake from 16.8 percent to 19.3 percent.
The entertainment company explained that this purchase demonstrates a strong belief in the future of YG Entertainment.
"We aim to acquire new growth momentum this year through diverse activities of our artists targeting the global market. We will also continue to enhance shareholder value," an official from YG Entertainment said. "Yang's purchase of treasury stocks marks the beginning of our commitment and efforts."
Earlier on Jan. 18, Park Jin-young, founder of JYP Entertainment, also purchased 60,200 shares of his company, amounting to an investment of 5 billion won. Consequently, his ownership stake increased from 15.22 percent to 15.37 percent.
The recent acquisitions of shares by the founders of these companies are widely seen as a strategy to bolster shareholder value in response to ongoing declines in stock prices.
Both companies have experienced their lowest stock prices this year. JYP's share price fell to 82,000 won on Jan. 16, amid concerns over sluggish album sales from its group ITZY. YG's stock value dropped to 40,800 won on Jan. 17 as well, following the company's failure to renew individual contracts with the members of BLACKPINK.
Although the purchases by Yang and Park have helped to slow the downward trend, stocks in the entertainment sector as a whole have been declining consistently so far this year.
"The downturn in stock performance is due primarily to a slowdown in growth, which is linked to a decline in album sales," explained Park Seong-guk, an analyst at Kyobo Securities. "The decrease in bulk purchases of K-pop albums in China, which became more pronounced starting last September, continues to impact the market."
The securities industry has analyzed that the prices of entertainment stocks are approaching their lowest point. "The rising popularity of K-pop in Japan and the U.S. is driving an increase in revenue for the entertainment industry," said Ji In-hae, an analyst at Shinhan Securities.
"If a peak in album sales could indicate a peak for the industry as a whole, per-fan spending should decrease as well. This seems unlikely. The decline in album sales is expected to lead to diversification of revenue streams and fan spending across various areas, ultimately contributing to an increase in overall sales."
source: The Korea Times
In the midst of a sharp decline in the stock prices of entertainment companies, founders of JYP and YG Entertainment have demonstrated their confidence in their firms' growth prospects by acquiring shares in their respective companies.
On Tuesday, YG Entertainment announced that its founder, Yang Hyun-suk, began purchasing 461,940 shares of the K-pop agency on Jan. 18. The total amount spent was approximately 20 billion won ($14.9 million), which increased Yang's ownership stake from 16.8 percent to 19.3 percent.
The entertainment company explained that this purchase demonstrates a strong belief in the future of YG Entertainment.
"We aim to acquire new growth momentum this year through diverse activities of our artists targeting the global market. We will also continue to enhance shareholder value," an official from YG Entertainment said. "Yang's purchase of treasury stocks marks the beginning of our commitment and efforts."
Earlier on Jan. 18, Park Jin-young, founder of JYP Entertainment, also purchased 60,200 shares of his company, amounting to an investment of 5 billion won. Consequently, his ownership stake increased from 15.22 percent to 15.37 percent.
The recent acquisitions of shares by the founders of these companies are widely seen as a strategy to bolster shareholder value in response to ongoing declines in stock prices.
Both companies have experienced their lowest stock prices this year. JYP's share price fell to 82,000 won on Jan. 16, amid concerns over sluggish album sales from its group ITZY. YG's stock value dropped to 40,800 won on Jan. 17 as well, following the company's failure to renew individual contracts with the members of BLACKPINK.
Although the purchases by Yang and Park have helped to slow the downward trend, stocks in the entertainment sector as a whole have been declining consistently so far this year.
"The downturn in stock performance is due primarily to a slowdown in growth, which is linked to a decline in album sales," explained Park Seong-guk, an analyst at Kyobo Securities. "The decrease in bulk purchases of K-pop albums in China, which became more pronounced starting last September, continues to impact the market."
The securities industry has analyzed that the prices of entertainment stocks are approaching their lowest point. "The rising popularity of K-pop in Japan and the U.S. is driving an increase in revenue for the entertainment industry," said Ji In-hae, an analyst at Shinhan Securities.
"If a peak in album sales could indicate a peak for the industry as a whole, per-fan spending should decrease as well. This seems unlikely. The decline in album sales is expected to lead to diversification of revenue streams and fan spending across various areas, ultimately contributing to an increase in overall sales."
source: The Korea Times