HYBE to Sell Shares in SM Entertainment to Tencent Music

    Quote from Bottles

    Short term I am happy, I don't want to see K-pop become a monopoly so Hybe losing it's shares in SM is good in my eyes.


    Long term, I am bit worried about Tencent's growing global entertainment monopoly.

    Good point. Just looking at the number of shares they have in companies is astronomical, along with the broad range of shares they have in companies like Discord, the the number of music streaming services (which boggles me why they need more than one).

    Quote from BIGnorBANG

    Don't be too surprised if they start merging these studios together and laying off a couple of hundred in the process.

    They seem to be hands off with companies they have shares in. I think layoffs are an industry trend because many companies hired too many during the pandemic. Tencent is huge they have a stake in so many companies which is why they generate the most revenue in the video game industry.


    It would be interesting to see what happens if they have an appetite for the kpop industry.They have the resources to dwarf the industry. Especially, if China opens up to the industry.

    Quote from StanGIDLE

    It would be interesting to see what happens if they have an appetite for the K-pop industry. They have the resources to dwarf the industry. Especially, if China opens up to the industry.

    I agree. The Chinese market dwarfs that of the US, in terms of potential, so expanding SM into China would be a massive coup for them. It does make me wonder if, in all honesty, SM might become the true global player, as I'd imagine Tencent would want to extend SM's presence across all of Asia by setting up various subsidiaries, and possibly make inroads in the Middle East, too (another untapped well for investment).

    Quote from BIGnorBANG

    I agree. The Chinese market dwarfs that of the US, in terms of potential, so expanding SM into China would be a massive coup for them. It does make me wonder if, in all honesty, SM might become the true global player, as I'd imagine Tencent would want to extend SM's presence across all of Asia by setting up various subsidiaries, and possibly make inroads in the Middle East, too (another untapped well for investment).

    US & Europe is the popular regions when people think global. However, China is the most valuable market. kpop is still viewed as niche in the western world and it's on the decline. I don't think kpop is going to explode in NA/Eur/Latam, and has already reached it's ceiling. I've said it on here many times, but kpop is in trouble in these regions with the rise of new popstars. A lot of people that were following kpop have now shifted to following the newer pop acts. I've noticed some of the stan accounts for kpop groups also posting western pop acts and that used to never happen tbh.


    Tencent having access to Asia, and the possibility of middle east is possibly where the real money is at. Don't get me wrong the regions I mentioned are still valuable but I think it gets dwarfed by the regions Tencent can tap into. I wonder what this means for a company like Hybe that shifted focus towards the regions I mentioned. Sometimes I feel their timing is off and a bit late when tapping into those markets. However, it's the reason why they're the only big 4 company to have a successful global group. It's evident that YG, JYPE, and SM had no chance in creating a succesful global group.

    Quote from StanGIDLE

    US & Europe is the popular regions when people think global. However, China is the most valuable market. kpop is still viewed as niche in the western world and it's on the decline. I don't think kpop is going to explode in NA/Eur/Latam, and has already reached it's ceiling. I've said it on here many times, but kpop is in trouble in these regions with the rise of new popstars. A lot of people that were following kpop have now shifted to following the newer pop acts. I've noticed some of the stan accounts for kpop groups also posting western pop acts and that used to never happen tbh.


    Tencent having access to Asia, and the possibility of middle east is possibly where the real money is at. Don't get me wrong the regions I mentioned are still valuable but I think it gets dwarfed by the regions Tencent can tap into. I wonder what this means for a company like Hybe that shifted focus towards the regions I mentioned. Sometimes I feel their timing is off and a bit late when tapping into those markets. However, it's the reason why they're the only big 4 company to have a successful global group. It's evident that YG, JYPE, and SM had no chance in creating a succesful global group.

    Hi,


    Agree with your sentiment about Asia market with Tencent. Hybe selling seems desperate to me?


    Let’s break this down: Hybe just sold its remaining 9.38% stake in SM Entertainment to Tencent for about $177 million USD — at a loss.

    • They bought in at ₩120,000 per share in 2023 (around $317M total)
    • Sold to Tencent in 2025 at ₩110,000 per share — an 8.3% loss

    That’s at a $140m USD loss ANDDDD:

    • They’re in legal chaos over court cases and at one point, Hybe’s market value tanked $420 million!
    • They needed emergency help from Mirae Asset just to cover nearly $293M in maturing debt.
      Mirae had to step in and underwrite their bond issuance. That’s not normal for a “healthy” company.
    • Samsung Securities called it: despite Hybe reporting a 400% jump in Q1 profit, analysts said they missed expectations and warned investors not to be fooled. This is because their previous quarters were pretty rough.
    • Now they’re giving Tencent — a rival with stakes in YG, Kakao, and massive Chinese platforms — a bigger seat at the K-pop table. Hybe just sold out to a competitor.
    • And there are whispers of stock manipulation using employee RSUs to prop up share value while chaos brews inside.

    This isn’t “realignment” like they claim. This is Hybe bleeding influence, losing trust, and trying to survive while looking strong. The company that once looked untouchable is now selling at a loss, under fire, and handing power to its rivals.


    Hybe didn’t make a move. They made a retreat. They tried a hostile takeover of SM, couldn’t fully execute, and bailed.


    -knysom

    Quote from SooYoung

    I wonder how it'll impact SM groups

    considering that the ban of Kpop in China have been lift


    i wonder if it'll open them some door to do concert there

    Are SM idols the most successful in China?


    Kris, Luhan, Tao and Victoria were the biggest kpop idols in China while they were still signed to SM. And now, Ningning is definitely the biggest among gen 4.


    For the non Chinese, I know Karina, Yoona, Irene all have huge fandoms, how about the rest?

    Quote from BIGnorBANG

    Hybe is offloading its remaining shares in SM to Tencent Music at the share price of 110,000 won per share, which is at a loss from when they bought them at around the 120,000 mark two years ago.

    https://m.entertain.naver.com/now/article/382/0001199923

    https://sports.donga.com/ent/a…/all/20250527/131693635/1

    Just when I thought SM was dying :pepe-popcorn:


    Looks like SM is on it's way to be the biggest Kpop company ever. ;judgingpepe:


    They always had the biggest and most successful number of Chinese idols. Chinese SM idols basically took over C-Pop when they returned home. Yoona did so well with only one drama and Jessica fairly competed with A list C-Pop idols/artists during her time there, so, there is so much potential for them.


    Does H2H have a Chinese member?

    Hybe should have treated New Jeans better.

    wow.. funny how haters will simply assumed hybe lost money , $140 M ??..

    Where did that amount come from?

    Lsm originally own around 18+% of sm, which he sold all to hybe, amounting to ard 555 b won .

    Hybe sold all sm shares in 3 seperate transactions..

    Sold back to kakao around 6+% during kakao open tender of 150k won pershare! 3+% at 90+k last year and today offload the rest 9+% at 110k !

    They got back their investment total 560 b won ... slight profit of 5b won!


    The one at lost is kakao and kakao entertainment who bought 40% of the shares at 150k won !

    It's not that many possible buyers in the market for a big size strategic stock post like that in SME, so it's kind of a logic buyer with Tencent. Even if Hybe make a bit of a loss I think they are happy with getting a the price they did and get rid of it. When you have decided to sell a post like that it more a problem of finding a buyer than making a bit of a loss.

    Hi,


    Look at you with the gymnastics. Let’s not cherry-pick numbers and pretend Hybe walked away as some financial genius here.


    As previously mentioned, HYBE bought 14.8% from Lee Soo-man at ₩120,000/share (₩422.8B), then clawed their way to 15.78% total during their failed hostile takeover. Total investment? Roughly ₩500–₩560B, depending on FX rates and acquisition fees. Let’s not pretend this was a chill ETF move — this was a boardroom war they gambled in, fumbled, then lost.


    Now let’s talk “profit”:

    • Sold ~6% back to Kakao at ₩150K = win.
    • Sold ~3% at ~₩90K = loss.
    • Dumped final 9.38% to Tencent, a literal competitor, at ₩110K = also a loss vs original cost basis.

    Sure, you can technically argue a ~₩5B “profit” on paper, but in my world YOU WILL GET LAUGHED OUT OF BOARDROOMS that deal in Hostiles and M&A’s. That’s pocket change in this game. That’s less than a rounding error for a company that spent two years tying up over $370M in capital and came away with zero board seats, zero influence, and zero upside. That is A LOSS in boardrooms worth their shit. People get sent to the basement for stuff like that.


    Also — let’s not ignore:


    • The 420B won market cap wipeout from the 2024 fiasco
    • The ₩400B debt repayment crisis that needed Mirae Asset to step in and underwrite
    • And the fact that Samsung Securities literally said Hybe underperformed in Q1 despite boasting a 400% profit spike (which mostly came from internal cost-cutting and deferred promotions, not sustainable artist revenue)

    If Hybe’s goal was to make a quick ₩5B while lighting their reputation, artist trust, and strategic K-pop influence on fire, then sure — mission accomplished.


    Meanwhile, Tencent walked away with a discounted foothold in SM just as China’s K-pop ban is easing. That’s not a win for Hybe — that’s them gambling and losing.


    But sure, let’s keep calling this a “slight profit” if that helps you sleep at night.


    Good grief…the levels some of you go through to literally shield the incompetence of HYBE’s financial moves is something else. This ain’t even

    about the artists at this point. This is about their financials based on public information.


    Just call a spade a spade.


    -knysom

    why so nasty, all i'm saying is where did the $140m loss come from?

    5 b won is of course peanuts but if hybe succeeded in buying 40% of sm then 500+ b won will be tied down ...

    .

    But instead kakao ceo got caught and kakao entertainment ipo now in shambles!

    So thats a win for hybe ...

    No matter how bad u try to claim hybe is in financial ruins, hybe shares hiting 300 soon and my faves coming back in 2 weeks ...

    Hi,


    Ah yes, classic — get called a hater for using facts, then get told you’re being nasty when you respond with receipts. The gaslighting is strong here. You came in questioning numbers, moved the goalposts, then played the victim when challenged. Textbook.


    Now, back to the math you keep asking about:


    You said “where did the $140M loss come from?” Repeating myself here, but I got a few minutes to retort:


    • Hybe bought ~15.78% of SM at ₩120K/share, starting with ₩422.8B from Lee Soo-man.
    • After a failed hostile takeover and more buying through public tender, they sank over ₩560B (~$420M USD) into SM.
    • Their final sale to Tencent was ₩243B (~$177M USD). Even with prior sales to Kakao at ₩150K and some at ₩90K, their average return barely breaks even.

    Now factor in:

    • 2 years of frozen capital
    • A blown-up takeover
    • Lost influence over one of K-pop’s “Big 3”
    • A PR disaster tied to that whole saga
    • Legal chaos with their main creative (who by the way designed the logo lol) and its most profitable GG that at one point had Fast Company calling the NJ brand “blue chip” which at one point led to a ₩420B drop in market cap


    …and yeah, that ~$140M figure? Totally real when you look at total cost vs. total value and lost opportunity. This wasn’t chess. It was cleanup.


    Also, let’s talk about your “Hybe shares hitting ₩300K soon” point like it’s some mic drop. Stock price ≠ corporate health. That’s all short term gains. Flashy charts don’t erase:


    • One more time - Mirae Asset stepping in to underwrite ₩400B in debt
    • Once again, Samsung Securities saying Hybe missed Q1 expectations
    • And RSU games and internal cost slashing keeping optics afloat

    So no — clarifying I’m not a hater, just not hypnotized by comeback hype and PR smoke. It must be my tone. Us New Yorkers be like that sometimes, specially when it’s about that scratch. We only give back energy we receive fam.


    I’ll be streaming the music like anyone else, but I’m not about to rewrite history and call a desperate exit to Tencent a win.


    You don’t have to love the truth, but calling it “hate” every time someone drops data? That’s…well, certainly something. Enjoy the comeback.


    -knysom

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