Seoul, South Korea. Photo Credit: Mathew Schwartz
With a much-publicized ownership dispute between SM Entertainment and Hybe now (mostly) in the rearview, SM artists are set to join the BTS agency’s WeVerse social platform. But the effects of the prior disagreement are still being felt, as South Korean authorities have reportedly raided SM’s Seoul headquarters as part of a stock-manipulation investigation.
Both developments just recently came to light in reports from regional outlets, only weeks after Kakao Entertainment secured a controlling 40 percent stake in SM Entertainment. The Saudi Arabia-backed Kakao Corp. subsidiary had been competing with Hybe to run SM, though the latter entity’s execs made clear (including via videos, press releases, media interviews, and more) that they considered the Supertone parent’s bid for control a “hostile takeover” attempt.
Ultimately, following a well-documented war of words, Hybe in mid-March called off these takeover plans, and soon thereafter, the Quality Control owner cashed in on a chunk of the approximately 15 percent piece of SM that it had previously bought; the transaction gave Kakao the shares needed to hit the aforesaid 40 percent controlling interest.
Now, as mentioned at the outset, SM artists (China-based WayV and Red Velvet’s Seulgi among them) are positioned to join Hybe’s WeVerse later this year, regional outlets have reported.
The union, seemingly one byproduct of the discussions and agreement that prompted the end of the takeover battle, will specifically see SM establish “an official community for each artist on WeVerse by the second half of this year,” according to a translation of Korean-language remarks attributed to the company.
Furthermore, SM signaled that its WeVerse participation will extend to the platform’s shop (through which diehard supporters can purchase physical releases, DVDs, apparel, and all manner of additional merchandise), per local reports. And with this significant collaboration having already entered the media spotlight, it’ll be worth looking out for other joint initiatives moving forward.
Similarly, it bears highlighting that at the height of its SM takeover bid, Hybe had emphasized the perceived importance of K-pop businesses’ coordinating to keep the genre commercially relevant on the world stage.
Despite the point and the wider Hybe-SM WeVerse tie-up, though, the effects of the companies’ no-holds-barred feud are still being felt. South Korea’s Financial Supervisory Service (FSS) reportedly raided SM’s headquarters today, after reportedly doing the same to the offices of Kakao and Kakao Entertainment last month.
According to the Korea Times, the raids stemmed particularly from concerns that Kakao had “manipulated stock prices in the process of acquiring shares” in SM. Moreover, the underlying probe is said to have initiated after Hybe in February – that is, at the peak of the confrontation with SM and Kakao – submitted a complaint to the FSS.
When trading wrapped on Tuesday, Hybe stock (KRX: 352820) was down slightly at ₩258,500/$195.94 per share, compared to an even two percent dip for SM Entertainment stock (KRX: 041510) and its ₩102,700/$77.85-per-share price as well as a 1.83 percent slip for Kakao stock (KRX: 035720), shares in which could be bought for ₩59,000/$44.72 apiece.