Big Hit Entertainment Officially Opens IPO Subscriptions For Individuals
Big Hit Entertainment’s initial public offering (IPO) subscriptions began for retail investors, gathering over 8 trillion won (approximately $6.9 billion) in deposits on the first day.
The company opened subscriptions for retail investors on October 5, taking applications from 10 a.m. to 4 p.m. KST.
According to NH Investment & Securities, one of Big Hit Entertainment’s lead underwriters, the total competition ratio calculated by the four securities companies that took subscriptions was recorded at 89.6 to 1. NH Investment & Securities recorded a competition ratio of 69.77 to 1, while Korea Investment & Securities recorded a competition ratio of 114.82 to 1. Mirae Asset Daewoo and its subsidiary Kiwoom Securities recorded competition ratios of 87.99 to 1 and 66.2 to 1 respectively.
Between the four securities companies, the total of subscription deposits amounted to over 8.6 trillion won (approximately $7.4 billion). Korea Investment & Securities recorded the highest deposit amount at 4.3 trillion won (approximately $3.7 billion). NH Investment & Securities followed with a total subscription deposit of 3 trillion won (approximately $2.6 billion). Mirae Asset Daewoo reported a total deposit of 1.1 trillion won (approximately $948.3 million), and Kiwoom Securities reported a total deposit of 165.6 billion won (approximately $142.9 million).
As Big Hit is considered one of the biggest IPO deals in the country this year, its first-day success has been compared to the deposits garnered by fellow blockbusters SK Biopharmaceuticals and Kakao Games Corporation. Big Hit Entertainment’s first-day deposits beat out that of SK Biopharmaceuticals, which recorded a total of 5.9 trillion won (approximately $5.1 billion), but fell behind Kakao Games Corporation, which recorded a total of 16.4 trillion won (approximately $14.1 billion) in deposits on the first day. This could be due to the tendency of investors to scope out the competition ratio on the first day before investing on the second day.
However, Big Hit Entertainment is predicted to come close to the record set by Kakao Games Corporation, which made history when it recorded a total subscription deposit of over 58 trillion won (approximately $50 billion).
Through the book building process, the public offering price was set at 135,000 won (approximately $116), and 1.4 million shares (20 percent of the total amount) were offered to retail investors.
In the case that the deposit surpasses 100 trillion won (approximately $86.2 billion), the competition ratio would skyrocket to 1,038 to 1. This means that even if an individual investor were to invest 100 million won (approximately $86,200), they would only receive one share.
After taking subscriptions from retail investors for two days, Big Hit Entertainment will list on the Korea Composite Stock Price Index (KOSPI) on October 15. This is the index of all common stocks traded on the Stock Market Division of the Korea Exchange and the equivalent of the S&P 500 of the United States.
Having obtained approximately 962.6 billion won (approximately $830 million) through the IPO, Big Hit Entertainment’s market capitalization stands at approximately 4.8 trillion won (approximately $4.1 billion).
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