SM Entertainment Video Statement Went VIRAL + HYBE Labels Responds

The fight between HYBE and SM Entertainment continues. Despite the viral SM Entertainment video statement that the company released via its official YouTube channel, HYBE Labels stated their plans remains unchanged. Check out the following report for more updates about HYBE and SM grand battle.

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SM Entertainment Video Statement Went Viral for Resisting Takeover from HYBE Labels

On February 20, SM Entertainment video statement went viral for the lengthy explanation of why they were against the takeover from HYBE Labels. This video statement of SM Entertainment created massive responses from international Kpop enthusiasts, dragging the grand battle between HYBE and SM into a larger scale.

In the video statement, SM Entertainment CFO Cheol Hyuk Jang presented various reasons why SM’s current management resisted HYBE’s takeover. And according to multiple media reports, it all comes down to these main reasons:

Joining HYBE will result in negligence towards SM Entertainment’s artists. HYBE already possesses numerous artists under multiple labels. Since SM will only become one of HYBE’s subsidiary labels, they will not be HYBE’s #1 priority.
HYBE’s takeover will only prevent SM Entertainment from going beyond its Kpop businesses. Instead, the company will have to merge other possible improvements, including fan platform businesses, with HYBE’s existing projects.
HYBE’s takeover will only limit SM Entertainment’s business opportunities in other aspects. SM will only remain as another music label company under HYBE.
HYBE’s domination in SM Entertainment only means more profits for HYBE. SM does not gain any benefits and will only lose its grand value.
HYBE and SM’s merger will only harm fans with more expensive pricing in tickets and merchandise.

In addition, CFO Cheol Hyuk Jang believed that HYBE’s takeover would result in the return of past mistakes by ‘SM particular shareholder’. That is because HYBE will dominate SM’s board of directors. That is why SM publicly pleaded to the remaining shareholders not to respond to HYBE’s tender offer.

SM Entertainment fully and publicly resists HYBE Labels and urges its shareholders not to sell their shares to HYBE.

HYBE Label Remains Solid: The Tender Offer Continues

Responding to SM Entertainment video statement, HYBE Label stated there was no change in their plans. E-Daily reported later on the same day that HYBE’s plans for SM Entertainment’s tender offer and management revision remain solid.

“We have already devised a plan to improve SM’s governance structure and are in the process of enhancing the company’s and shareholder’s values.
Therefore, we will proceed with the initial tender offer without any change.”
HYBE.

For the record, a tender offer is a proposal from investors to buy shares from company shareholders. The proposal is for the shareholders to sell their shares for a specific price at a particular time to the investor.

For example, HYBE proposed to SM’s shareholders that they would buy SM’s shares at 120,000 KRW (around 92.5 USD) with a deadline on February 28.

What the Public Says About HYBE and SM Entertainment Video Statement

Indeed, SM Entertainment released a comprehensive video statement to explain that HYBE Label takeover will only cause harm to the company. However, the public mostly responded against SM Entertainment video statement due to various discrepancies.

Firstly, the international Kpop community focuses on SM Entertainment video statement about the rising price of Kpop tickets. According to fans, HYBE manages the biggest Kpop legend in the world, thus resulting in an understandably higher price on par with global artists. Fans also pointed out that the value they receive with HYBE’s higher pricing differed from SM’s, including sound check, bigger venues, and more expensive stage productions.

SM in their public statement compared txt VIP ticket price and aespa regular ticket price, to show big bad hybe is selling more expensive. You’d wonder why sm stans are like this, when sm lies every second word and brainwashing them like this pic.twitter.com/06IfRgulzM
— milenna⁷ (@taesoothe) February 20, 2023

yes, they said on the graph that they’re comparing the highest ticket prices but the comparison would have only made sense if they’re comparing tickets that have the same benefits. if we’re looking at it in perspective, the price increase for the soundcheck benefit is reasonable
— ㄹㄹ (@dollzyunjin) February 20, 2023

Not to mention, all those price spikes are from HYBE getting them bigger venues & better production & equipment. Then we had a whole pandemic that raised the price for everything.. 🙄
Comparing that to the ticket price of a rookie group who hasn’t even had a CB, lol
— Terra⁷ ⟭⟬ ⟬⟭ (@LadyAlustria) February 20, 2023

Secondly, fans believe that SM Entertainment video statement represents the company’s fear of failure in implementing SM 3.0. Whereas SM 3.0 will only result in SM overworking their artists.

They want to overwork the artists and completely remove their control. Giving the artists control over their own work is how hybe thrives and creates legends. This is so beautiful but sad because it screams the difference which is SM designs products while Hybe grows artists.
— AgustGee⁷ G-Hobiuary 🐈 🪐 (@AgustGee3275) February 20, 2023

Nevertheless, another fan mentioned the concern that HYBE and SM Entertainment merger will only result in a massive monopoly in Kpop. This monopoly will result in unhealthy domination and control in the Kpop business.

as much as i hate sm as a company i’m glad that the employees have banded together to make a public statement about how insane hybe’s business practices are because fans will continue to kiss that company’s ass unless another company takes a stand
— min LEESEO DAY (@yenascape) February 20, 2023

hybe is notorious for disbanding groups they don’t deem profitable enough, what makes you think older sm artists will be safe if hybe successfully takes control? even beloved groups like red velvet and snsd won’t be safe because they aren’t gaining explosive popularity anymore!!
— min LEESEO DAY (@yenascape) February 20, 2023

Finally, SM Entertainment video statement release about their resistance against HYBE Label resulted in a downfall in SM’s shares.

E-daily reported that on the same day of SM Entertainment video statement release, the Korea Exchange market closed with a 6.38% decrease in SM’s shares. Despite their attempt to increase the share’s value, yesterday’s market closes with SM’s price at 121,800 KRW. This price is still reasonably close to HYBE’s target price of 120,000 KRW.

What’s Next?

Finally, SM Entertainment stated that they would hold an online corporate briefing with the following schedule and agenda:

February 21 at 9.00 AM KST = IP monetization strategy

February 23 at 9.00 AM KST = Overseas business strategy and investment strategy

The company will post the briefings on videos via SM Entertainment’s official YouTube channel.

At the same time, HYBE will conduct its IR (Investor Relations) call on February 21 at 4 PM KST. User TMIKpop who’s been keeping tabs on HYBE and SM Entertainment grand battle, posted the following deadline updates.

Deadlines:

Feb
20: SM IR call at 2 PM KST
21: Hybe IR call at 4 PM KST *newly announced
22: Injunction hearing
28: Hybe tender offer closes

Mar
6: Kakao paid-in capital increase transaction occurs
31: SM Shareholder meeting
— TMIKpop (@tmikpop) February 20, 2023

So, what do you think about SM Entertainment’s issue with HYBE Labels? Feel free to share your thoughts in the comments. Also, stay with Kpoppost’s Twitter, Facebook, Instagram, & Telegram channel for more updates.

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