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K-pop band BTS’ label, Big Hit, is a smash with Korean investors

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Big Hit Entertainment debuted at double its initial public offering (IPO) price on Thursday, valuing the management label of South Korean superstar K-pop group BTS at 9.6 trillion South Korean won ($8.38bn).

Shares of Big Hit, which relies heavily on the boy band for revenue opened at 270,000 won ($236) each, and were trading at 4 percent above the offer price by late morning in Seoul as investors sought a piece of the country’s largest stock listing in three years.

The listing is helping to revive the country’s IPO activity after two subdued years, with volumes rising 51 percent to $2.9bn so far this year, compared with the same period last year, according to Refinitiv data.

The pipeline looks strong after government stimulus to boost the economy amid the coronavirus pandemic flooded markets with cash, analysts said. Online game developer Krafton, and chat app operator Kakao’s mobile banking unit KakaoBank have begun the preliminary process for listing.

The Big Hit float also made the seven members of BTS instant multimillionaires with each granted shares worth 18.5 billion won ($16m) at the debut price.

The Billboard Chart topping group, which has a huge global following, accounted for 87.7 percent of the label’s revenue in the first half of 2020, according to a regulatory filing.

Analysts say the company has proved itself extremely online savvy, using YouTube and social media for market infiltration since in-person performances were cancelled because of the coronavirus pandemic.

BTS’ first paid online concert in June earned a Guinness World Records title for the most viewers of a live-streamed performance, with an audience of 757,000 from 107 countries.

The label also has an unprecedented level of control over its revenue streams via its Weverse fandom platform that distributes BTS content and sells merchandise, which has the potential to draw in other artists.

Rocky road to success

The listing ceremony at the Korea Exchange (KRX), attended by Big Hit founder and co-CEO Bang Si-hyuk, was broadcast live on the label’s YouTube channel.

Big Hit Entertainment’s co-CEO Bang Si-hyuk, middle, had pledged in 2017 to double the company’s revenue every year, a promise he has kept [Bloomberg]

“Big Hit has a different business model than the other big three K-Pop labels, JYP, SM and YG ,” said Nam Hyo-ji, analyst at KTB Investment & Securities. “Although not completely free from the effect of COVID-19, it’s freer than other labels.”

Bang’s road to riches has not always been smooth.

Big Hit, which he set up in 2005 after a successful career as a music producer, almost went bankrupt in its early years. The agency’s first breakthrough came in 2009 when its 8Eight’s Without a Heart became a local hit.

BTS debuted in 2013, and in a 2017 interview with Bloomberg, Bang mentioned plans to take Big Hit public. At the time, he pledged he would double the company’s revenue every year, a promise he has since achieved.

Military service debate

South Korean retail investors earlier this month laid out 58.4 trillion won ($51.1bn) in orders for Big Hit shares, falling just short of a record 58.55 trillion won ($51.2bn) for the retail portion of Kakao Games’ listing in September.

Thursday’s listing coincided with the United States’ Billboard Music Awards taking place in Los Angeles, where BTS won the first of two awards it was nominated for – Top Social Artist.

Back home, calls are mounting for BTS members to be granted alternatives or delays to South Korea’s mandatory military service, with some MPs and fans arguing they are doing plenty for their country without wearing a soldier’s uniform.

Under general rules, the eldest member of the band will be required to sign up by the end of next year, with the remaining six over the following five years.

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Trump’s misleading tweet about changing your vote, briefly explained

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Searches for changing one’s vote did not trend following the recent presidential debate, and just a few states appear to have processes for changing an early vote. But that didn’t stop President Trump from wrongly saying otherwise on Tuesday.

In early morning posts, the president falsely claimed on Twitter and Facebook that many people had Googled “Can I change my vote?” after the second presidential debate and said those searching wanted to change their vote over to him. Trump also wrongly claimed that most states have a mechanism for changing one’s vote. Actually, just a few states appear to have the ability, and it’s rarely used.

Twitter did not attach a label to Trump’s recent tweet.
Twitter

Trump’s claim about what was trending on Google after the debate doesn’t hold up. Searches for changing one’s vote were not among Google’s top trending searches for the day of the debate (October 22) or the day after. Searches for “Can I change my vote?” did increase slightly around the time of the debate, but there is no way to know whether the bump was related to the debate or whether the people searching were doing so in support of Trump.

It was only after Trump’s posts that searches about changing your vote spiked significantly. It’s worth noting that people were also searching for “Can I change my vote?” during a similar period before the 2016 presidential election.

Google declined to comment on the accuracy of Trump’s post.

Trump also claimed that these results indicate that most of the people who were searching for how to change their vote support him. But the Google Trends tool for the searches he mentioned does not provide that specific information.

Perhaps the most egregiously false claim in Trump’s recent posts is about “most states” having processes for changing your early vote. In fact, only a few states have such processes, and they can come with certain conditions. For instance, in Michigan, voters who vote absentee can ask for a new ballot by mail or in person until the day before the election.

The Center for Election Innovation’s David Becker told the Associated Press that changing one’s vote is “extremely rare.” Becker explained, “It’s hard enough to get people to vote once — it’s highly unlikely anybody will go through this process twice.”

Trump’s post on Facebook was accompanied by a link to Facebook’s Voting Information Center.
Facebook

At the time of publication, Trump’s false claims had drawn about 84,000 and 187,000 “Likes” on Twitter and Facebook, respectively. Trump’s posts accelerated searches about changing your vote in places like the swing state of Florida, where changing one’s vote after casting it is not possible. Those numbers are a reminder of the president’s capacity to spread misinformation quickly.

On Facebook, the president’s post came with a label directing people to Facebook’s Voting Information Center, but no fact-checking label. Twitter had no annotation on the president’s post. Neither company responded to a request for comment.

That Trump is willing to spread misinformation to benefit himself and his campaign isn’t a surprise. He does that a lot. Still, just days before a presidential election in which millions have already voted, this latest episode demonstrates that the president has no qualms about using false claims about voting to cause confusion and sow doubt in the electoral process.

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Nearly 6,000 civilian casualties in Afghanistan so far this year

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From January to September, 5,939 civilians – 2,117 people killed and 3,822 wounded – were casualties of the fighting, the UN says.

Nearly 6,000 Afghan civilians were killed or wounded in the first nine months of the year as heavy fighting between government forces and Taliban fighters rages on despite efforts to find peace, the United Nations has said.

From January to September, there were 5,939 civilian casualties in the fighting – 2,117 people killed and 3,822 wounded, the UN Assistance Mission in Afghanistan (UNAMA) said in a quarterly report on Tuesday.

“High levels of violence continue with a devastating impact on civilians, with Afghanistan remaining among the deadliest places in the world to be a civilian,” the report said.

Civilian casualties were 30 percent lower than in the same period last year but UNAMA said violence has failed to slow since the beginning of talks between government negotiators and the Taliban that began in Qatar’s capital, Doha, last month.

An injured girl receives treatment at a hospital after an attack in Khost province [Anwarullah/Reuters]

The Taliban was responsible for 45 percent of civilian casualties while government troops caused 23 percent, it said. United States-led international forces were responsible for two percent.

Most of the remainder occurred in crossfire, or were caused by ISIL (ISIS) or “undetermined” anti-government or pro-government elements, according to the report.

Ground fighting caused the most casualties followed by suicide and roadside bomb attacks, targeted killings by the Taliban and air raids by Afghan troops, the UN mission said.

Fighting has sharply increased in several parts of the country in recent weeks as government negotiators and the Taliban have failed to make progress in the peace talks.

At least 24 people , mostly teens, were killed in a suicide bomb attack at an education centre in Kabul [Mohammad Ismail/Reuters]

The Taliban has been fighting the Afghan government since it was toppled from power in a US-led invasion in 2001.

Washington blamed the then-Taliban rulers for harbouring al-Qaeda leaders, including Osama bin Laden. Al-Qaeda was accused of plotting the 9/11 attacks.

Calls for urgent reduction of violence

Meanwhile, the US envoy for Afghanistan, Zalmay Khalilzad, said on Tuesday that the level of violence in the country was still too high and the Kabul government and Taliban fighters must work harder towards forging a ceasefire at the Doha talks.

Khalilzad made the comments before heading to the Qatari capital to hold meetings with the two sides.

“I return to the region disappointed that despite commitments to lower violence, it has not happened. The window to achieve a political settlement will not stay open forever,” he said in a tweet.

There needs to be “an agreement on a reduction of violence leading to a permanent and comprehensive ceasefire”, added Khalilzad.

A deal in February between the US and the Taliban paved the way for foreign forces to leave Afghanistan by May 2021 in exchange for counterterrorism guarantees from the Taliban, which agreed to sit with the Afghan government to negotiate a permanent ceasefire and a power-sharing formula.

But progress at the intra-Afghan talks has been slow since their start in mid-September and diplomats and officials have warned that rising violence back home is sapping trust.

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Classic toy tie-up: Etch A Sketch maker to acquire Rubik’s Cube

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Spin Master Corp., the company behind the Etch A Sketch and Paw Patrol brands, has agreed to acquire Rubik’s Brand Ltd. for about $50 million, tying together two of the world’s most iconic toy brands.

The merger comes at a boom time for classic toymakers, as parents turn to familiar products to entertain kids stuck in lockdown. Like sales of Uno, Monopoly and Barbie dolls, Rubik’s Cube purchases have spiked during the pandemic, according to the puzzle maker’s chief executive officer, Christoph Bettin. He expects sales to jump 15% to 20% in 2020, compared with a normal year, when people purchase between 5 million and 10 million cubes.

By acquiring Rubik’s, Toronto-based Spin Master can better compete with its larger rivals, Hasbro Inc. and Mattel Inc. All three companies have pivoted to become less reliant on actual product sales, diversifying into television shows, films and broader entertainment properties based on their toys. Spin Master CEO Anton Rabie said he wouldn’t rule out films or TV shows based on Rubik’s Cubes, but he was focused for now on creating more cube-solving competitions and crossmarketing it with the company’s other products, like the Perplexus.

“Whoever you are, it really has a broad appeal from a consumer standpoint,” Rabie said in an interview. “It’s actually going to become the crown jewel; it will be the most important part of our portfolio worldwide.”

Hungarian inventor Erno Rubik created the Rubik’s Cube in 1974, a solid block featuring squares with colored stickers that users could twist and turn without it falling apart. It gained popularity in the 1980s and has remained one of the best-selling toys of all time, spawning spinoff versions, international competitions of puzzle solvers, books and documentaries.

The toy has been particularly well-suited to pandemic conditions. During lockdowns, parents have sought to give kids puzzles that boost problem-solving skills useful in math and science careers. Normally, toys tied to major film franchises are among the most popular products headed into the holidays, but studios have delayed the release of major new movies because of coronavirus. So classic products are experiencing a mini-renaissance.

“The whole pandemic has really increased games and puzzles,” Rabie said. “But whether the pandemic existed or didn’t exist, we’d still buy Rubik’s. It’s had such steady sales for decades.”

Rubik’s CEO Bettin said it was the right time to sell the company, with the founding families behind it ready to move on. London-based Rubik’s Brand was formed out of a partnership between Erno Rubik and the late entrepreneur Tom Kremer, while private equity firm Bancroft Investment holds a minority stake in the company.

Early on, Bettin felt Spin Master was the right home for the puzzle toy, he said. Spin Master, which was started by a group of three friends in 1994, has expanded through the purchase of well-known brands, including Erector sets and Etch A Sketch. Rabie says he works to honor the “legacy” of those products, which Bettin cited as a key reason to sell the brand to Spin Master over larger companies that were interested.

“It was important for us to not be lost in the crowd, and to be sufficiently important and cared for,” Bettin said. “And there’s a balance between being with someone large enough to invest, and agile enough to ensure you are key part of their plans.”

Spin Master won’t own Rubik’s Cubes in time for the holiday season – the transaction is expected to close on Jan. 4. At that time, the company will move Rubik’s operations from a small office in London’s Notting Hill neighborhood to Spin Master’s new games operations center in Long Island.

Some of Rubik’s Brand’s 10 employees will be part of the transition, but they won’t stay permanently, Bettin said.

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