On the 28th, SME's stock price is up over 5%. This follows the news that the second-largest shareholder, HYBE, is selling all of its equity to Tencent Music Entertainment (Tencent).
As of 9:24 a.m. on the 28th, SME shares are trading at 137,000 won, an increase of 7,100 won (5.47%) from the previous trading day on the KOSDAQ market.
Previously, HYBE, the second-largest shareholder of SME, announced on the 27th that it would sell 2,212,237 shares (9.38%) of SME equity. The disposal price per share is set at 110,000 won, making the total transaction size 243.3 billion won.
Lee Gi-hoon, a researcher at Hana Securities, noted that considering the concerns about overhang (potential sell-off) that were bound to arise at prices higher than HYBE's public buyout price of 120,000 won, merely resolving this is quite positive.
He added that since Tencent is investing in both Kakao and SME, various synergies can be expected from future opportunities in the Chinese market, raising the target price from 150,000 won to 170,000 won.
HYBE entered the competition for management control of SME in 2023, acquiring a significant amount of SME equity.