Institutional investors queue up to invest in more than 1,000 times the numbers of shares on offer, with Big Hit rising high on the success of the South Korean group which has featured on top of the list on the US Billboard Hot 100 singles chart with their biggest song “Dynamite”.
Big Hit has priced the initial public offering IPO at 135,000 won ($115) per share, it said in a regulatory filing, the top of an indicative price range of 105,000-135,000 which was declared earlier this month.
Around 1,420 institutional investors shares in the IPO in pre-subscription offers, looking for 1,117 times the number available, the filing said. About 98% said they are willing to pay the top-range price or more.
“Big Hit is classified as a kind of global export firm,” said Park Sung-ho, analyst at Yuanta Securities Korea.
“Not only has it proven its ability to use Youtube, social media for smart market infiltration, it has fandom platform Weverse which gives unprecedented clarity and control over its revenue sources for a label, and may grow into a true platform player as outside artists increasingly join.”
With 49.7 billion more reportedly won at profit in the first half of 2020 by Big Hit as its online concert and merchandise sales on Weverse app than the cancellation owning with the COVID-19 outbreak.
Institutional and retail investors’ subscriptions are due on October 5 and 6.
The IPO will raise 962.6 billion won ($820 million) through the offer of 7.13 million new shares. It is the biggest South Korean IPO since Celltrion Healthcare 091990.KQ raised 1 trillion won in 2017.
The pricing values Big Hit at about 4.8 trillion won, taking into account common shares plus redeemable preferred shares that will be converted into common shares upon the IPO.
Some analysts predict gross bids, citing the liquidity in the market from retail investors could hit 100 trillion won ($85 billion), making it South Korea’s hottest initial public offering.
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