Bang Si-hyuk incurs massive losses over "Kakao fight" for SM despite "trusting" Lee Soo-man + HYBE and SM stocks "tumble"
Source: Herald Pop
"Rather than making a profit, it's just a plan to blow tens of billions"
HYBE Chairman Bang Si-hyuk, who failed to secure SM management rights was forced into a situation where he had to bear huge losses. He couldn't sell even half of his SM shares he had secured by spending 450.9 billion won during Kakao's tender offer. SM's stock price plummeted and he's now in a position to lose tens of billions of won, let alone profit.
Bang Si-hyuk previously joined forces with former general manager Lee Soo-man to secure SM shares by spending 450.9 billion won to secure management rights. Bang Si-hyuk bought the shares for 422.8 billion won (120,000 won/share) and then bought an additional 28.1 billion won of shares. However, he failed to secure management rights. In response, Kakao participated in the tender offer and tried to recover the invested amount but this also did not work out.
On the 27th, Kakao announced that the final competition rate for the tender offer for SM was 2.2 to 1. As a result, the participation allocation rate was determined to be about 44%, If 100 shares were requested for a tender offer, only 44 shares could be disposed of.
Of the 3.53 million shares offered for sale by HYBE, only 1.56 shares can be sold. Previously HYBE bought Lee Soo-man's shares for 120,000 won per share so the resulting profit was about 46.8 billion won. The problem, however, is the remaining stock that cannot be sold through the tender offer. The valuation loss on the remaining stake due to the decline in SM shares is greater than the profits from the tender offer.
On the 27th, SM shares closed at 91,100 won, down 15% from the previous trading day. In other words, a valuation loss of 28,900 won/share for total loss of 60 billion won was incurred compared to HYBE's purchase price of 120,000/share. Looking at the disposal gains and valuation losses, the company currently has incurred losses around 10-20 billion won.
Depending of the negotiation terms of the additional contract signed with Lee Soo-man, the extent of the loss may increase.
The outlook for SM's share price is also bleak. Since SM's stock price soared following management disputes and series of tender offers, the industry's consensus is that the possibility that SM stock rises is unlikely. If SM's share price falls further and returns to 70,000 won level before management disputes, HYBE's valuation loss will increase even more. Due to such concerns, HYBE's stock price has also been on a downward trend day after day.
Meanwhile, Lee Soo-man announced that he did not participate in Kakao's tender offer. As for his remaining 3.65% stake in SM, he simply stated, "I did not participate in the tender offer conducted by Kakao." However, there is a put option (right to sell at a specific price) on the remaining SM shares held by Lee Soo-man. HYBE previously gave Lee Soo-man the right to sell his remaining stake at 120,000 won/share.
As a result, it's difficult for HYBE to sell their remaining stake for the time being. If they throw the shares into the market, the stock price will fall even further and they will inevitably suffer more losses. There are also concerns about damages to individual investors.
HYBE stated, "There has been no decision on how to dispose of the remaining stock."
In the end, only former general manager Lee Soo-man benefited greatly. With regards to this, HYBE's position is "whether the put option is exercised or not is up to Lee Soo-man who has the right."
- [+483, -5] He ended up ruining himself .. he only has himself to blame. Meanwhile Lee Soo-man came out legendary with a great head for business ㅋ
- [+105, -13] They can sell it slowly so there's nothing to regret but for anyone else in dire straits.. well
- [+95, -4] SM and YG are wasting money doing useless business meanwhile Bang Si-hyuk is blowing hundreds of billions of won in one-shot ㅋ ㅋ ㅋ ㅋ
- [+76, -51] The price shot up in the first place because HYBE threw themselves in. He's the one that hindered Kakao from securing management rights at a reasonable price!!
- [+64, -5] Inspiration borne from greedㅋ
- [+27, -0] Guys, there's no reason to worry about chaebols in the comments.. these are people that live in a different world with a different level of wealth and money cushions ~~~ don't worry about them.
- [+18, -0] Eh.. I don't understand. Is Bang Si-hyuk claiming he got betrayed by Lee Soo-man? Lee Soo-man tried to hand over SM to Bang Si-hyuk but he's the one that pulled out because Kakao was aggressively trying to dispute management rights..? Who betrayed who here..?
- [+18, -0] He tried to play with an old gumiho fox!!!!
- [+11, -3] Wasn't Bang Si-hyuk the one trying to eat up SM??!
- [+8, -0] Lee Soo-man is a nine-tailed foxㅋㅋ
https://dailynaver.bl0gsp0t.com/2023/03/bang-si-hyuk-incurs-massive-losses-over.html
