By Kwak Yeon-soo
Investors are rushing to dump shares of YG Entertainment over the escalating scandal involving Seungri, a member of its iconic boy band Big Bang.
YG, one of Korea's three major K-pop management agencies, is home to top K-pop artists Big Bang, BLACKPINK, iKON and WINNER, but its stock has been losing value fast in line with Seungri's fall from grace.
The 29-year-old singer is facing multiple allegations over whether he condoned drug use and sexual assaults at a nightclub Burning Sun, where he served as a public relations director, and attempted to buy sex services for foreign investors.
The scandal involving Seungri also includes alleged corrupt ties with district police officers.
Amid mounting criminal investigations, Seungri announced via Instagram Monday, that he will quit show business.
On Tuesday, YG shares finished trading at 35,900 won ($32), down 3.36 percent from the previous day. It marked the lowest stock price since Nov. 23, 2018.
A day earlier, the shares plunged 14 percent compared to the previous session, closing its trade at 37,150 won. More than 110 billion won has evaporated on Monday, with YG's market cap falling to 675.6 billion won from 786 billion won last Friday.
Foreign and institutional investors continued selling their YG shares after the news reports that Seungri, two male singers, and Seungri's business partners shared illicitly recorded sex videos and photos of women, taken without their consent, via mobile messenger group chats.
"As a result of performance deterioration and the involvement of artists in scandals related to drug use and sexual assaults, the investor sentiment was hurt," Lee Ki-hoon, an analyst at Hana Financial Investment, wrote in a report. "However, stocks are likely to rebound in accordance to strong fundamentals."
Another analyst said, "Investor sentiment was hurt by Seungri's case, but the price of stock will increase in the short term. It will not hinder the overall growth of the entertainment industry."
Other entertainment shares also dropped, with SM Entertainment falling 3.7 percent and JYP Entertainment shedding 4 percent.
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| YG Entertainment's CEO Yang Hyun-suk |
YG, one of Korea's three major K-pop management agencies, is home to top K-pop artists Big Bang, BLACKPINK, iKON and WINNER, but its stock has been losing value fast in line with Seungri's fall from grace.
The 29-year-old singer is facing multiple allegations over whether he condoned drug use and sexual assaults at a nightclub Burning Sun, where he served as a public relations director, and attempted to buy sex services for foreign investors.
The scandal involving Seungri also includes alleged corrupt ties with district police officers.
 |
| Seungri of K-pop boy band Big Bang |
On Tuesday, YG shares finished trading at 35,900 won ($32), down 3.36 percent from the previous day. It marked the lowest stock price since Nov. 23, 2018.
A day earlier, the shares plunged 14 percent compared to the previous session, closing its trade at 37,150 won. More than 110 billion won has evaporated on Monday, with YG's market cap falling to 675.6 billion won from 786 billion won last Friday.
Foreign and institutional investors continued selling their YG shares after the news reports that Seungri, two male singers, and Seungri's business partners shared illicitly recorded sex videos and photos of women, taken without their consent, via mobile messenger group chats.
"As a result of performance deterioration and the involvement of artists in scandals related to drug use and sexual assaults, the investor sentiment was hurt," Lee Ki-hoon, an analyst at Hana Financial Investment, wrote in a report. "However, stocks are likely to rebound in accordance to strong fundamentals."
Another analyst said, "Investor sentiment was hurt by Seungri's case, but the price of stock will increase in the short term. It will not hinder the overall growth of the entertainment industry."
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