Found by coincidence this blogger and he had two interesting articles about BigShit’s IPO exposing some of the wrong/overrated statements as well as sharing the same opinion about BigShit’s expenses being covered out of BTS’s money.
This
https://polsygol.wordpress.com/2018/03/23/bighit-and-big-hype/
BigHit and big hype
March 23, 2018
When I first read that BigHit had had a
real gangbusters 2017, my thoughts were, “Good for them! It’s no surprise considering how well BTS has been doing! Awesome!”
But then I started coming across a lot of very enthusiastic (and occasionally financially illiterate)
fan translations, and I started to think,
Whoa, I’d better do a post about all this.
Here’s the thing: BigHit is planning on becoming a public company, with
an initial public offering (IPO) planned for next year. (If you don’t know the difference between a private company and a public company, look
here. If you don’t know the difference between revenues and profits,
coughcoughPannChoacoughcough, look
here.) I was a business reporter during the dot-com boom–believe me, I have seen many IPOs get hyped to fucking moon, and that’s what’s happening here.
Why is it happening? Given the Korean
media‘s penchant for printing anything that gets it clicks, it could be pumping up BigHit for that reason alone. But the important thing to remember about IPOs is that they are often an exit strategy for the original investors in the company, and that
the original investors plus the banks that handle the IPO want
to sell all the shares they have for offer at a good price. That means that right now, we are in the middle of a marketing campaign to sell shares of BigHit to a larger circle of investors.
That’s just how IPOs operate, and there’s nothing inherently wrong with it. What troubles me is the combination of IPO hype and K-Pop fans who are younger and obviously very inexperienced as investors. Remember, good investors have 1. clear financial goals, 2. realistic strategies to meet those goals, and 3. the discipline to stick to those strategies and work the plan.
Not a reason to invest. I’m sad about that, too.
The good news is,
there’s actually quite a bit of financial information out there about BigHit, because shares are being traded
over the counter. The bad news is…how accurate is this information? In the United States, being an
unlisted security means that you don’t have to comply with all those pesky SEC regulations–you know, the ones that protect investors from fraud.
Now, as BigHit nears its IPO date, it is going to have to dot its
Is and cross its
Ts and get in compliance with stricter accounting standards. But we’re not there yet, which is why
breathlessly comparing its results to those of actual public companies is a little naive. BigHit doesn’t have to play by the same rules as a public company, and if reporters are currently getting information about BigHit from anyone with an interest in seeing the IPO go well…you start to see the conflict of interest there. (And don’t get all excited because the people hyping the company are being called
economists. The kind of economists who hype companies are the kind of economists who work for the banks that handle IPOs.)
Where does this get
especially naive?
Yeah. That 35% (!!!) profit margin sure is impressive, isn’t it?
Of course, BigHit does not yet have to comply with the costs of being a public company (which are considerable), but the main thing there is that seven-year contract timeline: BTS debuted in 2013. BigHit will go public in 2019.
One year after the company goes public, BTS’ contract will be up for renewal.
You want to know a secret about BigHit’s $23 million net profit?
It is coming out of the pockets of the members of BTS. They are the ones earning that money, and under their current contracts, they are just letting it go again. They may well decide not to do that any more when their contracts come up for renewal. A six figure salary may seem like a lot–
until you realize that your company is running a fucking eight-figure profit off your labor!
The downside of a company hyping a profit margin is that, generally speaking, the talent can read (and hire lawyers) just as well as the investing public. Of course, thanks to this IPO, by 2020 the members’ contract demands will no longer be the problem of BigHit’s original investors–a very fortuitous bit of timing there.
But of course there’s always Option B: Hold a firm line against those BTS punks, so that various members or even the entire group walks!
Ah-ha-ha-ha-ha-ha! Oh my God, can you even imagine!
HA! HA! HA!
Yeah, this is the long-term problem with BigHit: They are not
diversified. Like, at
all.
This graphic made me cackle:
Gee, why did YG have such a slump in its operating income last year?
Because BigBang didn’t release a new album in 2017. Investors have long complained about
YG’s reliance on BigBang to make money, and the company’s stock reliably takes a beating whenever investors
worry about BigBang’s members going into the military or
a member has a scandal.
And YG is about a
thousand times more diversified than BigHit. Jesus.
Does this mean that BTS and/or BigHit don’t have a bright future? Not at all! But it does means that you might want to hold off on sinking your retirement savings into BigHit’s IPO, even if you really love Suga a whole, whole bunch.
————-—————
And this:
https://polsygol.wordpress.com/2020/07/04/the-fan-perspective-vs-the-investor-perspective/
The fan perspective vs. the investor perspective
July 4, 2020
So BigHit is preceding with its initial public offering (an IPO transforms a privately-owned company into a publicly-owned company, and if you don’t know what that means, look
here and keep your money in your pocket). I saw something that kind of piqued my interest, so I went poking around, and
oh my God. I mean, I wasn’t expecting K-Pop fans to have a reasoned or mature understanding of what investors are looking for, but…OK, they really really don’t.
At all. I mean, if I don’t do this post, I’m going to hyperventilate.
An example of the naiveté: Fans are claiming that any negative stories that are coming out now are probably the result of investors trying to drive down the value of BigHit’s IPO. Of course, any
positivestories that are coming out now are probably the result of
BigHit’s early investors and the banks handling the IPO trying to drive its value up, so that they can get more money when they cash out. And their cashing out is
pretty much the entire purpose of an IPO.
An overvalued IPO screws the people who buy the publicly-traded shares early on, because the stock price will typically fall to something more in keeping with the company’s actual value. Which is something to keep in mind if you are such a huge fan of [insert BigHit group here] that you wanted to jump right in and snap up shares right away.
You absolutely do not want to bring a fan mentality to investing.
Please. If you are not an experienced investor, but you just LOVE [insert BigHit group here] SO MUCH that you absolutely MUST own shares of BigHit, treat it like any other entertainment purchase–you put your money out there,
and you never ever expect to get it back.
Why am I saying this? Am I just a big ole hater of [insert BigHit group here]?
No. I am someone who understands that a label and a group are
two different entities. While they are somewhat connected, that connection is far from absolute–one can do well while the other can founder. In addition, a company and its stock are two different entities, and one can do well while the other can founder.
A K-Pop example: If you look at
SM Entertainment and their relationship with Like Planning, you see that SM Entertainment itself might be making loads of money…but if they fork all that money over to Like Planning before they report their results, then their stock isn’t going to do so well. And of course the performance of SM’s stock is at an even further remove from how Exo or Super Junior or SuperM or Red Velvet or NCT or Girl’s Generation or BoA are doing–there are
several degrees of separation between, say, album sales and the pockets of investors who bought SM stock.
So, let’s NOT think like fans. (By the way, some investors totally do think like fans–they stan General Electric or whatnot. They also tend to lose a
lot of money.) What kinds of questions would a more-experienced investor ask before they jumped on that BigHit IPO?
Here’s a few–and trust me, there’s a lot more:
- Do I want to be purchasing individual stocks at all? Is there another form of investing that I am more comfortable with or that is more consistent with my financial goals?
- The laws that protect investors vary from country to country–am I comfortable with Korea’s regulatory framework?
- Am I comfortable trading on the exchange or exchanges where BigHit stock will be bought and sold?
- If I do not live in Korea, will buying stock in a Korean company complicate my taxes? Are there significant fees involved? How will currency fluctuations affect the value of my investment?
- Do I want to invest in the entertainment industry? Does that fit into my investment strategy and financial goals?
- Am I comfortable buying a company that only recently expanded and restructured itself?
- Does buying a company that is the size of BigHit fit into my investment strategy and financial goals?
- Do I want to buy BigHit stock immediately after its IPO?
- BigHit has merged with other companies in order to diversify itself away from BTS. Do I think they are truly diversified, or are they going to lose a huge chunk of their revenues when the members of BTS go into the military?
- What is the exact ownership structure that was created by these mergers and expansions? Will the shares offered the public allow shareholders a meaningful say in how the company is run?
———————-
I laughed at this article which was written long time ago, after they debuted, ca 2014
Update 7/2020: I’m noticing traffic from what appears to me to be a VERY click-bait-y site that is mischaracterizing the content of this post. It it impossible for me to block the link, so I …
polsygol.wordpress.com
I am not going to copy paste the article it has a bunch of videos, but some quotes:
Their videos tend to run along the lines of “Take us seriously as delinquents”
Or, “Take us seriously as romantic objects”
And there’s always this weird undercurrent of violence. I’m like, no, no, and no.
Likewise their live performances tend to lack humor.
War of Hormone Video:
Oh my God, it’s
hilarious! Smutty (turn on the CC if you want to see how the choreography matches the lyrics) and just so funny–the ass-grabbing and -slapping, the erection dance (I mean, what else can you call what happens at the 2:15 mark?), and some hand gestures that are, um, open to interpretation.
Filthy interpretation. (And it got a 12 rating! Wow, the MOGEF is really blind to innuendo, isn’t it? “What? All he said was that he was going to sit at his computer every night and then pop a pimple! And
RapMon wasn’t staring at that girl! He just wanted to know what time it was! Jeez!”)
Sorry, but I’ve always had a weakness for songs that are unapologetically about being a horny kid (which is why I will always love “Turn Around”).