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Power Struggle at HYBE Leads to Stock Market Chaos

Daniel Kim Views  

ADOR’s Independence Attempt Triggers Audit
Tensions Surface Between HYBE and ADOR Management
NewJeans’ HYBE IP Remains Unchanged Despite Heightened Volatility

The stock price of HYBE is plummeting due to disputes surrounding management rights.

As of 9:40 AM on the 23rd, the stock price of HYBE is trading at 205,000 won ($175.25), a decrease of 7,500 won (3.53%) compared to the previous trading day.

The day before, it closed at 212,500 won, a 7.81% drop from the previous trading day. Based on the closing price, HYBE’s market capitalization was 8.8511 trillion won ($7.56 billion), a decrease of about 750 billion won ($640 million) from the previous trading day.

Auditory Inspection Triggered by ADOR’s Attempt to Become Independent

HYBE has invoked its right to audit its subsidiary, ADOR, requested a general shareholders’ meeting to replace the board of directors, and demanded the resignation of CEO Min Hee Jin.

The audit inquiry includes allegations of leaks of confidential information (internal HYBE information, contracts, artist personal information, etc.), attempts to seize management rights, suspicions of external consulting, creating negative public opinion about HYBE artists, and attempts to persuade artists’ parents. The deadline for the response to the audit inquiry is the afternoon of the 23rd.

HYBE has requested a temporary shareholders’ meeting and completed proposals for the resignation of three directors, including Min and new director nominations.

Conflict Between HYBE and ADOR Management Surfaces

The conflict between HYBE and Min Hee Jin, CEO of ADOR, has surfaced.

ADOR, a label under HYBE founded by Min in 2021, has gained prominence within HYBE as the girl group NewJeans, which debuted under Min’s leadership, achieved global success.

ADOR refuted claims of attempting to seize management rights, stating that the conflict with HYBE originated from a plagiarism dispute between subsidiaries.

ADOR issued an official press release claiming that HYBE is manipulating the media over allegations of an attempt to seize management rights following ILLIT’s copying of NewJeans.

NewJeans Remains HYBE IP Despite Increased Volatility

The current ownership structure of ADOR consists of 80% HYBE and 20% Min Hee Jin and others.

NewJeans has signed an exclusive contract with ADOR, and as long as HYBE holds 80% of ADOR’s shares, NewJeans is considered HYBE’s IP.

An Do Young, a researcher at Korea Investment & Securities, said, “Given the strong influence of Min, short-term stock price volatility is expected to increase,” but added, “Both sides do not want to damage the NewJeans IP, so the possibility of the album activities scheduled for release in May and June being affected is low.”

Lee Hwa Jung, a researcher at NH Investment & Securities, also said, “The overall label has efficient content production and rookie development capabilities, so dependence on a single label is not increasing,” and added, “It would be best if the conflict related to ADOR is resolved quickly and smoothly, but even if that is not the case, the damage to HYBE’s medium and long-term growth momentum will be limited.”

Daniel Kim
content@viewusglobal.com

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