Big Hit that changed the company name… realizing’platform potential’ through large-scale M&A

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Hive (formerly Big Hit Entertainment) has reached a new turn in six months after listing. It is evaluated that it is maximizing growth potential by reinforcing its aspect as a comprehensive content platform company by reorganizing its governance structure while showing rapid joint ventures and mergers and acquisitions. It is analyzed that the’growth story’ presented at the time of listing is being implemented faster than expected.

According to the Korea Exchange on the 5th, Hive recorded 248,000 won, up 5,000 won (2.06%) from the previous trading day. Shares, which had weakened after listing, have been on the rise this year. Big Hit, which remained at the 150,000 won level at the beginning of the year, showed a sharp rise from February. As of this year, the rate of increase alone reached about 57%. The market cap, which once decreased to 4 trillion won, also rose to 8,834.6 billion won on the same day.

The share price hike was driven by news of a major merger and acquisition (M&A) announced last week. On the 2nd, Hive announced that it will acquire Ithaca Holdings of the United States through its subsidiary Big Hit America. It is a comprehensive media holding company with SB Projects in charge of managing Ariana Grande and Justin Bieber. Along with the acquisition, major executives and staff members of Ithaca Holdings and affiliated artists will participate in Hive’s capital increase to strengthen the cooperative relationship.

Even before this acquisition, Hive showed cooperation with domestic competitors through active equity investment. In January, it took over the Naver’s video platform, V Live, and handed over a 49% stake in the company’s Weverse operating subsidiary to Naver. Along with this, it invested about 18% in YG Plus, a subsidiary of YG, a competitive entertainment company. Subsequently, in February, it established a joint label with Universal Music Group (UMG), one of the world’s top three record labels, to establish a strategic cooperative relationship.

The stock market evaluates the success of collaboration as a result of Hive’s potential as a platform company. Lee Ki-hoon, a researcher at Hana Financial Investment, said, “It is not possible to acquire or cooperate with companies that are already the world’s No. 1 companies in their respective fields simply because they have funds. In order to share MD planning and production capabilities, equity investments, acquisitions, and partnerships are continuing.”

Hive has recently been embracing its vision as a platform company through collaboration with domestic and overseas companies and reorganization of its governance structure. With the company name change last month, Hive divided the company structure into three areas: label, platform, and solution. Afterwards, the company decided to establish’Big Hit Music’ by dividing the existing Big Hit Entertainment business, which was the company’s core growth engine, in a physical way. Hive, which remains a listed corporation, is expected to serve as a holding company that invests in solutions and platforms with each label under its subsidiary.

The label business division includes Big Hit Music, Pledis Entertainment, Source Music, and KOZ Entertainment as affiliates. Solution divisions such as Big Hit 3 Sixty and Big Hit IP will be absorbed into Hive’s divisions, while Superv and Big Hit Edu remain subsidiaries. In the platform area, the business will be developed through Weverse Company, a Weverse operator. The color as a content platform company based on artists and fandom is becoming more evident.

There is also a positive outlook on this direction of growth. Jin-ah Ahn, a researcher at Ebest Investment & Securities, said, “The platform business that was launched in a timely manner has quickly dominated the market as a business that has not existed in the world. It is predicted that it will establish itself as a major business that will enable securing high margins by internalizing the value chain of businesses linked to the platform.”