Kakao Entertainment is seeking to raise up to 100 billion won through the sale of its stake in its subsidiary, Starship Ent.

whoa?

explain like i'm five?

why are twitter users acting like this is some investment in IVE itself when it scans more as a divestment to me? like Kakao Ent fundraising via IVE, but not explicitly for IVE

i'm gonna wait for some translations of this news regardless

EDIT:

"Kakao Entertainment reportedly put about 20% of its old shares on the negotiating table this time, including Vice President Seo's stake. On top of that, the company plans to sell a total of 30% of new shares to the outside world by tying up more than 10% of new shares"

nvm now it makes sense to me

Quote from chilltime

explain like i'm five?

Look like they want to sell some shares in SSE.

Quote from hieuken

Look like they want to sell some shares in SSE.

but starship isn't in stock market? Yo, new IPO? that's big news then.

Ive's impact

Quote from chilltime

explain like i'm five?

Screenshot_20230709-130245.jpg

They want to tidying up.

Instead of something like X 60%, Y 18%, Z 4%, A 5%, B 3%, C 1% etc holders, they want to make it into X 60%, and then bringing in new shareholder, F, to hold second largest eg. 30% or something.

If they were such a great money maker, why would you sell a share?

They invested 1 billion USD into 40% of SM, why not invest 1/10th [i.e. give Starship an additional 100 million for marketing] of what they spent on SM into a great money maker as well, and retain 100% of Starship.

Just saying it don't make any sense, unless they been scamming, and it is not a great money maker.

Quote from K-PL

If they were such a great money maker, why would you sell a share?

They invested 1 billion USD into 40% of SM, why not invest 1/10th of that into a great money maker, and retain 100% of Starship.

Just saying it don't make any sense, unless they been scamming, and it is not a great money maker.

That's not what they are trying to do

Quote from Lulu_Key

That's not what they are trying to do

It is. They are selling off a share. You don't do that with a great money maker. The internals [accounts] are obviously worse than SMs, since they would invest 1 billion for 40% of SM but not give Starship 100 million.

Quote from Lulu_Key

That's not what they are trying to do

Sshhh let's kpl (and its 3 friends) living in their delusion

You have to read in between the lines. This is largely a liquidity event for VP Seo.

They did nothing for their US expansion lol

Quote from chilltime

but starship isn't in stock market? Yo, new IPO? that's big news then.

I remember reading while back sse going public this year. I guess its time

Quote from meijwy

If this goes through no more Kakao Privilege.

Kakao might be trying to improve their financials for a potential IPO later.

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what no more kakao privelege? when they are going to invest so much money in future for overseas lol.

Now we know why they wanted to destroy 5050

Quote from killthisfenty

They did nothing for their US expansion lol

they are going to start it now. Not just US but a more global approach probably.

Quote from oneinamiyeon

You have to read in between the lines. This is largely a liquidity event for VP Seo.

Yes, so if it is a great money maker, Kakao would snap up the old shares for sale and new ones, but it is being sold to the outside instead. I mean Kakao just invested 1 billion in 40% of SM, only three months ago. 100 million is nothing in comparison if its a great buy.

@meijwy, we look at growth in album sales compared to the previous comeback, and it is extremely un-impressive when compared to other groups. That is not even taking into account the abnormal sales pattern which is totally different to the rest of the industry lol.

Quote from chilltime

but starship isn't in stock market? Yo, new IPO? that's big news then.

This is a sale to private equity, not a public offering. They might have plans to list later, but not now.

Quote from oneinamiyeon

This is a sale to private equity, not a public offering. They might have plans to list later, but not now.

i get it now. the buying of sm must have put pressure on kakao to sell something else.

Quote from oneinamiyeon

This is a sale to private equity, not a public offering. They might have plans to list later, but not now.

Usually the initial investor will "invest" the next stake if the internals are good. So the internals must be not as good as SMs internals.

Quote from K-PL

Yes, so if it is a great money maker, Kakao would snap up the old shares for sale and new ones, but it is being sold to the outside instead. I mean Kakao just invested 1 billion in 40% of SM, only three months ago. 100 million is nothing in comparison if its a great buy.

@meijwy, we look at growth in album sales compared to the previous comeback, and it is extremely un-impressive when compared to other groups. That is not even taking into account the abnormal sales pattern which is totally different to the rest of the industry lol.

The market is hot and VP Seo apparently felt it's now or never for him to exit - i mean, he's waited this long to sell, he could wait until his shares get converted into Kakao ones later if he believes the valuations are going to continue to climb.

Quote from K-PL

Yes, so if it is a great money maker, Kakao would snap up the old shares for sale and new ones, but it is being sold to the outside instead. I mean Kakao just invested 1 billion in 40% of SM, only three months ago. 100 million is nothing in comparison if its a great buy.

@meijwy, we look at growth in album sales compared to the previous comeback, and it is extremely un-impressive when compared to other groups. That is not even taking into account the abnormal sales pattern which is totally different to the rest of the industry lol.

but kakao said it would invest the money in ive?

Quote from chilltime

but kakao said it would invest the money in ive?

i read it as "we hope whoever buys these shares will align with our goal of expanding into the US"

Quote from oneinamiyeon

The market is hot and VP Seo apparently felt it's now or never for him to exit - i mean, he's waited this long to sell, he could wait until his shares get converted into Kakao ones later if he believes the valuations are going to continue to climb.

No pre-ipo, Kakao the initial investor has first right to buy any shares. Kakao have obviously declined. The internal accounts for SM and gidle, and everything else Kakao have a stake in are obviously better, that they would rather invest elsewhere instead.

Quote from chilltime

but kakao said it would invest the money in ive?

No they invested in the last 7 months their money instead into SM, 1 billion, and gidles company, 70 million USD. As a majority shareholder they can see the internal accounts and know what the profit is.

Not surprised K-PL is so invested in this lmfao gg

Anyways I'm too dumb for this big brain finance thing

Quote from xiaotingskeep1r

Anyways I'm too dumb for this big brain finance thing

unironically the smartest take yet

Quote from KpopJop

unironically the smartest take yet

Quote from xiaotingskeep1r

before you misunderstand me, let me be clear: I also have no idea what is going on and I'm proud of it

Quote from KpopJop

before you misunderstand me, let me be clear: I also have no idea what is going on and I'm proud of it

oh ok gg my bad (guess i really am that dumb ) but lets be chronically unaware together <33

Waiting for more info but my initial understanding is that Kakao + current Starship head (who together own ~80% of Starship) plan to issue over 10% new shares as part of fundraising as well as sell around 20% of existing shares, making it a total of around 30% shares sold. Sounds like Kakao still plans on retaining over 50% stake in Starship unless my math is off.

My hot take? Kakao overspent on SM earlier this year and now they're strapped for cash. They're liquidating shares in Starship because they have some wriggle room to sell while still maintaining majority stake. Tbh unless Kakao's stake in Starship goes below 50% I don't see this as a significant move.

Quote from K-PL

No pre-ipo, Kakao the initial investor has first right to buy any shares. Kakao have obviously declined. The internal accounts for SM and gidle, and everything else Kakao have a stake in are obviously better, that they would rather invest elsewhere instead.

No they invested in the last 7 months their money instead into SM, 1 billion, and gidles company, 70 million USD. As a majority shareholder they can see the internal accounts and know what the profit is.

I think they just blew their budget and then some on SM, which was an opportunistic acquisition they didn't plan for. Hence the implementation of cost cutting measures (i.e. like you'd buy a limited edition widget you can't really afford and feel better about it by surviving on ramen for a bit) . They're fine with diluting 10% of what the last valuation was - idk what it was but not anywhere close to 50x P/E.

I don't know top of my head whether the SM and Cube investments were for old shares (the money would just buy out officers like LSM and not go to the company to use, you're really just swapping owners) or new shares (new money that could be used for market expansion, etc...).

Think of new shares like the gov't printing money - your 1000 dollars is still 1000 dollars, but it's worth less. In this case everyone who owns Starship shares loses 10% of the value. This is called "dilution". Collectively, they dilute everyone enough to get 100bn of cash to Starship's bank account to use.

Thing is 50x P/E is pretty rich. I don't think they're going to get valued at a trillion. Last time I checked comps were trading around 30x. But think of it this way - you don't need to sell anywhere close to 50x for a sale to make sense. Even though you've diluted 10%, if you sell at anything above 33x using my example, it means the the rest of your shares are make up for it as you're valuing your company higher than the market average.

Quote from K-PL

If they were such a great money maker, why would you sell a share?

So when Bang Sihyuk, even long before Hybe's IPO, sold 25% of his stake in Bighit to outside investors as a form of fundraising, does that mean Bighit wasn't a great money maker?

isnt this just normal business decision, they(starship) need fund to expand their wing to international market, thats why they issue new share, and you all know kakao fund already depleted alot to buy sm, so this just normal way to raise fund