Tag: Park Ji Won

HYBE’s financial troubles seem unrelenting this year, with the company’s stock prices plunging to unprecedented lows following the new CEO announcement.

Did The New CEO Announcement Cause HYBE Stock Prices to Plummet?

Earlier this week, it was revealed that Lee Jae Sang, the current Chief Strategy Officer (CSO), will replace Park Ji Won as HYBE’s CEO. This decision was met with disapproval from fan communities, as Lee’s past controversies resurfaced almost immediately after the news broke. The stock market also reacted negatively to this sudden leadership change, with HYBE stock hitting its lowest price in 18 months on Thursday, July 25.

HYBE shares closed at ₩170,000 KRW (approximately $123 USD) on Thursday, marking the lowest point since January 2023. This decline occurred just a day after the announcement of Lee Jae Sang’s appointment as CEO. The stock had previously been recovering from a dip caused by BTS’s hiatus announcement.

Who is Lee Jae Sang?

HYBE has yet to hold its shareholder and board meetings where the final decision to appoint Lee Jae Sang as the new CEO will be made. Lee joined HYBE in 2018, back when it was still known as Big Hit Entertainment.

Following the disclosure of Lee’s appointment, numerous allegations against him began circulating on community sites. These allegations included accusations of “threatening” ADOR’s former vice president and coercing them into revealing private conversations with CEO Min Hee Jin. Additionally, Lee has faced criticism for his involvement in acquiring Ithaca Holdings while he was the CEO of HYBE America, as well as for co-establishing an NFT company aimed at creating NFTs using HYBE artists.

The acquisition of Ithaca Holdings in 2021 has been particularly contentious. HYBE America has reported significant net losses for two consecutive years following the purchase. The losses amounted to ₩70.1 billion KRW (approximately $50.8 million USD) in the first year and ₩142 billion KRW (approximately $103 million USD) in the second year. This acquisition has been viewed by many as a financial misstep, contributing to HYBE’s ongoing struggles.

HYBE America’s investment in the NFT company Levvels has also proved to be a financial burden. In 2023, the investment generated an operating loss of ₩18.0 billion KRW (approximately $13.0 million USD). The financial strain continued into the first quarter of 2024, with the company recording a loss of ₩3.50 billion KRW (approximately $2.53 million USD).

What Will Happen to HYBE?

The controversies and financial losses associated with Lee Jae Sang have understandably caused concern among investors and fans alike. His past decisions and the financial repercussions of those decisions are now being scrutinized more than ever as he steps into the role of CEO. The market’s reaction to his appointment reflects a broader uncertainty about the future direction of HYBE under his leadership.

As HYBE prepares for its upcoming shareholder and board meetings, the company faces the dual challenge of restoring investor confidence and addressing the internal and external criticisms leveled against its new CEO. The outcome of these meetings and the company’s subsequent actions will be crucial in determining whether HYBE can navigate through these turbulent times and regain its footing in the competitive entertainment industry.

In an unexpected announcement, Park Ji Won has revealed that he will step down as the CEO of HYBE. He also confirmed his successor in the same statement.

Park Ji Won Steps Down as HYBE CEO

In his statement to the HYBE staff, Park explained the rationale behind this leadership transition, emphasizing the need for fresh perspectives and new strategies to drive the company forward in an ever-evolving industry.

“We determined that a new leadership was necessary to actively prepare for and respond to HYBE’s future, and lead the new changes,” he said.

It was also confirmed that Lee Jae Sang will replace Park as the new HYBE CEO.

“Following that plan, Lee Jae Sang has been preparing to be the new CEO and the right person to lead HYBE 2.0 since the beginning of this year,” Park added.

“The direction for the new leadership and organizational changes has been a subject of long consideration and discussion. Mr. Lee is the right person to effectively implement HYBE’s mid-to-long-term growth strategy, inheriting HYBE’s vision, mission, and core values while leveraging his domestic and international business network. I sincerely support HYBE’s new leadership and new changes, and as a member of HYBE, I will continue to contribute to HYBE’s future in areas where I can utilize my expertise and network.”

Park Ji Won joined HYBE as CEO in May 2020, bringing with him a wealth of experience from his successful tenure at Nexon. During his time at HYBE, he played a pivotal role in the company’s significant milestones, including its IPO process, rebranding, and the establishment of a multi-label system. These initiatives have been instrumental in HYBE’s rapid growth and global expansion, solidifying its position as a major player in the entertainment industry.

A New Future for HYBE?

Park Ji Won expressed confidence in Lee Jae Sang’s ability to lead the company into its next phase. He highlighted Lee’s extensive experience and vision, which align with HYBE’s goals and aspirations. This leadership change marks a significant moment for HYBE, as it continues to innovate and adapt in the dynamic world of entertainment.

The transition in leadership is seen as a strategic move to ensure that HYBE remains at the forefront of the industry, continuing to deliver groundbreaking projects and nurture its diverse portfolio of artists. As Lee Jae Sang steps into his new role, the company and its stakeholders are looking forward to the continued success and growth under his leadership.