Why “BIGHIT” Is Trending Online Amidst The Latest Development Following HYBE’s Acquisition Of SM Entertainment’s Stocks

Here’s the full story on HYBE and the nature of the labels!

One of the biggest stories in K-Pop right now is the situation occurring between SM Entertainment and HYBE. On February 10, HYBE announced it had purchased Lee Soo Man’s shares, making it the largest shareholder in the company.

SM Entertainment’s founder Lee Soo Man | SM Entertainment

On February 20 (KST), SM Entertainment’s CFO, Cheol Hyuk Jang, released a video revealing his take on the situation.

CFO Cheol Hyuk Hang | SMTOWN/YouTube

In the video, Cheol Hyuk Jang shared his views on the “Hostile Takeover” from HYBE after the company acquired 14.8% of the shares of SM Entertainment after buying them from Lee Soo Man.

| SMTOWN/YouTube

| SMTOWN/YouTube   

Yet, amidst the new video coming out, some netizens were shocked to see the phrase “BIGHIT” trending.

On social media, netizens couldn’t hide their relief that amongst the drama, HYBE K-Pop groups like BTS and TXT were seemingly safe from everything that was going on.

In particular, they praised Bang Si Hyuk for making BIGHIT MUSIC independently run back in 2021 before the Ithaca merger.

Yet, as BIGHIT started trending, many netizens shared confusion about how the company is a separate entity and how it impacts the current situation with SM Entertainment.

HYBE is a corporation and acts as an umbrella company for many different subsidiary labels, including BIGHIT, BE:LIFT, ADOR, Pledis, and Source Music. All of the artists under the different labels work within HYBE but are operated by their own subsidiaries.

The format of HYBE following the Ithaca merger | Koreaboo

In regard to BIGHIT, the only three artists under the company are BTS, TXT, and soloist Lee Hyun.

The members of BTS under BIGHIT | @bts_bighit/Twitter

The members of TXT | @txt_bighit/Twitter

Soloist Lee Hyun is also under BIGHIT MUSIC | @leehyun_bighit/Twitter

Yet, although the significance of BIGHIT MUSIC might not seem important, many ARMYs and fans have shared their relief as the label is an independent entity.

BIGHIT MUSIC is a subsidiary with 100% of the shares held by HYBE. Therefore, it is not possible for anyone to directly purchase shares of BIGHIT MUSIC on the stock market or from other investors. Only HYBE has the ability to transfer its BIGHIT MUSIC shares or make the decision to issue new BIGHIT MUSIC shares to others.

With HYBE being a public company, its shares are traded and therefore, it is possible for others to potentially purchase a large stake in HYBE and then exercise influence over the operations of BIGHIT MUSIC, with BIGHIT MUSIC being a subsidiary of HYBE. However, at this time, there’s no concern about this happening.

The different labels under HYBE

In particular, it is important when it comes to the decision-making for the groups under the subsidiary labels. Unless HYBE decides to significantly change the current structure, the subsidiary labels will continue to operate the way they have been.

HYBE’s founder Bang Si Hyuk | Yonhap News

By looking at the structure of both companies, netizens also don’t have to worry as Bang Si Hyuk still owns a large part of HYBE, with 31.8% of the shares.

The structure of HYBE | HYBE Corp

SM’s structure is very different as the majority of the company is held by minority shareholders, and it’s much easier for another investor to obtain the single largest stake in the company, which is what HYBE did by acquiring 14.8% of SM’s shares.

The structure of SM Entertainment | SM Entertainment

With the situation between SM Entertainment and HYBE still hot news and very uncertain, many netizens have shared their relief at Bang Si Hyuk’s previous decisions that ensure all the artists are safe and not impacted by what is going on.

You can read more from the video below.

SM Entertainment Releases Video Denouncing HYBE’s Takeover Of The Company, Vows To Protect SM As It Is