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Sunday, April 18, 2021

BTS’s IPO Seen As Test Case for K-Pop in Global Market

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BTS’s music, sponsored by Samsung and built around the Korean corporation’s popular Galaxy devices, has earned the United States record number of No. 1 singles on Spotify and performed extremely well in Asia, particularly in Japan, where the band has a large following. The group’s brand—it does not use a traditional record label—has become as synonymous with South Korean pop as The Beatles’ global appeal in the 1960s.

The popularity of South Korean pop culture overseas was a primary focus for the IPO’s underwriters, Bae Woo Hyun and Jay Y. Lee, when they pitched the company’s inaugural stock offering to a U.S. investment bank. On Friday, the first day of trading, the company’s stock soared 89 percent, eventually selling for more than four times its IPO price, just ahead of its first-day closing price, on record trading volume, according to the Korea Exchange.

The lucrative IPO capped a meteoric rise for BTS, which began in 2013 as a small family band on the K-pop circuit with one member, Jimin, and has exploded into a global brand that has sold 20 million concert tickets in the United States alone since 2014. They came to the international stage in 2015 with the release of their debut single, “DNA,” which led to a recent concert at Madison Square Garden, and embarked on a major U.S. concert tour in August.

By opening the deals in South Korea and overseas to foreign investors, BTS management is betting it will significantly increase the revenue it can make from collaborations with Samsung and other organizations and brands as well as new subscription-based services.

Management has previously announced that Apple, the dominant smartphone and music company, has signed a global licensing deal with the group, as well as deals with various video producers.

The high price the stock climbed on its debut Friday suggests some foreign institutional investors are betting that the hype will continue to build.

“My confidence level is still high because this company’s success is only going to get better,” said Youn Seong Kyu, the manager of a manager of an investment committee at a Seoul brokerage house. “Even though they are one of the biggest musical stars in the world, this company is still small, so it is harder for people to define it.”

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