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BTS label Big Hit soars in market debut

BTS label Big Hit soared in its stock market debut. Yahoo Finance's Melody Hahm discusses.

Video Transcript

ADAM SHAPIRO: Let's talk about, you know, I'm thinking of Hanson and "Mmmbop," but that's the generation-- that's even, I'm older than that. But tell us about BTS, Melody.

MELODY HAHM: Hanson? You could at least say the Backstreet Boys return. You know, shares of Big Hit Entertainment, based in South Korea, had a pretty wild ride today, Thursday. Opened at more than double the offering price, surged about 30%, which is actually the daily limit for the KOSPI, the Korean stock index, in early trading before actually closing down on the day. The stock opened at 270,000 won, that's the equivalent about $235 a share. That's double the company's offering price of that 135,000 won.

We know that it was one of the most oversubscribed IPOs in the history of the Korean stock market, and there are lots of caveats here, right? 97% of Big Hit Entertainment's revenue came from BTS alone in 2019. Of course, the average lifecycle of a boy band is about three to seven years. BTS has been around for about six years now, and the oldest member is 27 years old. He is slated to have to serve in the military, which mandates that Korean men by the age of 28, they do have to serve a mandatory two years, but the Korean government is actually revisiting that role just because of his political and cultural clout during this time. I'm curious to see how this stock continues to evolve, because we know the BTS Army, their rabid fanbase, has really, you know, in the same way retail investors have flocked to certain stocks here in the United States, Big Hit is one of those big winners from that sort of pent up demand and interest here.

ADAM SHAPIRO: All right, I think we're going to tech markets and take a deep breath as we are less than three weeks from the election, and this decision from the Korean government as well, a lot riding on it. Melody Hahm, thank you very much. Dan Howley, thank you very much.