Big Hit Entertainment's stock price has plummeted after listing, and the stock price of the institution is expected to be released in a large amount within one month.
According to the Electronic Disclosure System of the Financial Supervisory Service, the number of Big Hit stocks owned by institutional investors that will be released to the market after the mandatory holding period is completed within the next month, totaling 1527,000 shares.
Considering that there are about 6.7 million Big Hit stocks currently available for circulation, 23% of the stock will be added to the market.
Besides, in addition to the already listed common stocks, more than 888,000 redeemable convertible preferred stocks can be converted to common stock at any time and further listed.
As a result, there are concerns that the stock price of Big Hit may fall due to the supply-demand effects like Kakao Games, which was listed last month.
Kakao Games' stock price plunged 7.36% on the 12th, a month after listing, after the one-month mandatory holding period came to the market.
The problem is that the number of Big Hits to be released in the market sooner or later is relatively higher than that of Kakao Games in the same period.
Kakao Games released more than 4.45 million shares in one month of listing, which is about 30% of the first circulating stocks, and 6.16% of total common stocks.
In the case of Big Hit, if you add redeemable convertible preferred stocks, the total amount of new available stocks in the next month is about 24.16 thousand shares, about 32% of the current circulating stocks, and 6.96% of all common stocks, all higher than Kakao Games.
Big Hit's share price fell 22.29% on the 16th following a drop of 4.44% on the 15th, the first day of listing, and plunged 25.74% for two days.
During this period, the average purchase price of individuals was 263,000 won, which is more than 60,000 won higher than the current stock price, and the average loss rate is estimated to reach about 24%.
However, it is comforting that the stock price has already fallen considerably and the room for further decline has decreased.
According to Infomax, the average of the Big Hit target price suggested by 8 domestic securities companies is KRW 251,500.
This is about 25% higher than the current stock price, which means that securities companies have the potential to recover the stock price.
Hyun-yong Kim, a researcher at Hyundai Motor Securities, predicted, "The 4Q earnings direction is good with the release of albums by BTS and Seventeen, so there is a high possibility that the industry and stock prices will rise as the year-end approaches.
(Photo = Yonhap News)