The golden age arrived when BTS announced their comeback, igniting the passion of global fans with an 82-show tour across 34 cities and sending HYBE's stock price soaring to its highest level in four years.

On June 1, news broke across social media that NPS — the third-largest long-term shareholder of HYBE, the Korean entertainment company behind global idol group BTS — had allegedly offloaded 75,977 shares in a single large-scale block sale, with the National Pension Service of Korea accounting for 97% of the sell-off at a divestment rate as high as 15.44%.

This, however, turned out to be misinformation. In reality, NPS's large-scale disposal of HYBE shares occurred on May 31, 2024: As the court approved former executive Min Hee-jin’s injunction—prohibiting HYBE from exercising its voting rights to dismiss her at the ADOR shareholders' meeting—the market interpreted the NPS's subsequent divestment of 438,898 shares as a defensive risk-mitigation move against HYBE’s escalating management uncertainties.

5일 금융감독원 전자공시시스템에 공시된 2024년 5월 기준 '임원·주요주주 특정증권 등 소유상황보고서', '주식 등의 대량보유상황 보고서'를 종합하면, 국민연금은 지난 5월 31일 기준으로 하이브 주식을 43만8898주를 매도했다. 국민연금은 2024년 3월말 기준 하이브의 3대 주주였다. 이로써 국민연금의 하이브 지분율은 직전 7.63%에서 6.57%로 줄었다. 감소분이 1.06%p다.According to a consolidated review of the "Executive & Major Shareholder Specific Securities Ownership Report" and the "Report on Status of Large Holdings of Stocks" as of May 2024, disclosed via the Financial Supervisory Service's electronic disclosure system (DART) on the 5th, the National Pension Service sold 438,898 shares of HYBE stock as of May 31. The National Pension Service was HYBE's third-largest shareholder as of the end of March 2024. Consequently, the National Pension Service's stake in HYBE decreased by 1.06 percentage points, dropping from 7.63% to 6.57%.

However, this does not mean the precarious financial situation suspected by fans is non-existent. Although HYBE’s stock price surged to a four-year high in January 2026, company executives and several early partners chose that exact moment to cash out approximately 5.16 billion KRW via a block deal at a staggering 36% discount. Since then, HYBE’s stock has been in a continuous downward spiral. As of June 8, 2026, amid a Korean stock market circuit breaker trigger, HYBE’s stock price plummeted below the 200,000 KRW mark, marking a monthly collapse of over 25%. This financial bleeding follows a 2025 annual report that showed historically high revenues, yet a catastrophic plunge in net profit resulting in a massive deficit.

What do these signals mean? Will artists like BTS be affected? What is the true state of HYBE’s finances? And will the fraud investigation into founder Bang Si-hyuk impact HYBE's future?

An Aggressive Strategy

Revenue Fluctuations

As HYBE's highest-earning artists, BTS concluded their nearly two-year hiatus with a full-member military service in 2025 and announced a 2026 comeback plan. However, the rapidly organized global tour requires colossal upfront investments in preparation and promotion, which is frantically burning through HYBE’s cash flow.

Meanwhile, HYBE's other key revenue artist, SEVENTEEN, began its enlistment phase in 2024 and is projected to have all members enlisted by 2026, officially entering a military hiatus and suspending group activities. The transition period between BTS's return and SEVENTEEN's hiatus will inevitably trigger a severe structural imbalance between revenue and expenditure.

Mounting Costs

Looking at HYBE's other active artists, NewJeans achieved an unprecedented "money-printing monster" status immediately upon debut, clearing all training debts and receiving profit distribution within their first year. However, since becoming entangled in contract disputes and workplace bullying scandals in 2024, their career has been put on pause—halting yet another primary revenue engine. Since then, domestically debuted groups such as TWS, ILLIT, and CORTIS appear to have maintained "peak at debut" metrics on streaming charts and social media. But as of now, there are no public reports confirming whether ILLIT (debuted just over a year ago) or CORTIS(debuted less than a year ago) have reached the point of recouping debut costs and generating profit distributions.

Furthermore, due to HYBE’s multi-label matrix, the frequency of launching new groups has far exceeded industry norms. In the three short years between 2022 and 2025, HYBE launched a total of eight groups (including regional debuts). In comparison, rival entertainment giants like SM, JYP, and YG historically adhere to a disciplined cycle of launching a new group only every 2 to 3, or even 5 to 6 years. HYBE management explicitly admitted in their financial notes that "high initial investment costs were heavily concentrated on the debut and promotion of multiple new artist lineups."To bridge the gap in the Western market during BTS’s enlistment, HYBE spent approximately $1.37 billion USD across two acquisitions in 2021 and 2023: Ithaca Holdings (which manages Justin Bieber and Ariana Grande) and hip-hop giant QC Media Holdings. These multi-billion-dollar investments were designed to seamlessly hedge against the revenue void left by BTS.

However, following subsequent contract disputes and renewal friction with these global superstars, the value of these assets severely depreciated by 2025. Even though HYBE quickly launched Katseye, a girl group customized for the Western market, it remains incredibly difficult to recover the losses from these failed, toxic overseas assets in the short term.

Market Shifts

HYBE’s financial reports clearly mirror a structural shift in the K-pop and broader global music industry. In HYBE's 2023 financial report, album revenue accounted for 970.4 billion KRW, while performance (concert) revenue stood at 359.1 billion KRW—a nearly threefold gap. By 2025, album revenue dropped to 773.0 billion KRW, while performance revenue climbed to 764.0 billion KRW, bringing the two metrics to near parity.

An album requires a one-time production cost, after which it functions as a continuous money-printing machine. Conversely, a concert incurs heavy, compounding marginal costs—from venue fees to catering for every staff member. The market has proven that the era of low-cost, high-margin physical records is fading; the industry has entered a high-input, lower-margin touring era. Music remains the entry point for an IP's lifecycle, but profit realization is increasingly dependent on live touring, fan economy, and the Weverse ecosystem.

As a consequence of this structural transformation, the time allotted for genuine musical creation and artistic cultivation is stripped away, replacing it with industrialized, low-cost, short-form content engineered to feed short-video algorithms.

A Paper Loss

Public doubts about HYBE's financial health largely trace back to its 2025 annual report: among the "Big Four" K-pop agencies, HYBE was the only one to post a net loss—256.7 billion KRW—despite generating revenue that nearly matched the other three combined.

The Q1 2026 report appears to extend this impression, with an operating loss of 196.6 billion KRW. Yet a closer look at the composition shows that the loss stemmed neither from revenue nor from core operations: quarterly revenue in fact rose 39.5% year-on-year. The real anomaly lay on the cost side—a single, sizable new expense.

HYBE addressed this in a footnote: the preceding figures exclude the 255.0 billion KRW in share-grant expense paid as employee compensation in Q1 2026.

In substance, this expense represents founder and largest shareholder Bang Si-hyuk gifting his personally held shares to employees. Under accounting standards, it must be recognized as a one-time expense on the income statement—yet the company itself incurred no cash outflow. The income statement thus absorbed an additional 255.0 billion KRW in expense, producing a book loss, even as the company's assets remained untouched.

Strip out this one-time, non-cash expense, and HYBE's adjusted core operating profit for the quarter was in fact a positive 58.5 billion KRW. In other words, the 196.6 billion KRW loss was composed almost entirely of an expense that was never actually paid out.

The arrangement is calculated on several levels. Funding the award with the shareholder's personal stock rather than the company's cash left HYBE's cash flow untouched while projecting a gesture of returning value to employees; transferring shares by gift rather than by sale does not constitute "cashing out" in legal terms, and triggers no capital gains tax for Bang himself—a markedly safer route than selling on the open market while under investigation. A loss confined to paper thus served at once to reassure employees and steady the share price.

The timing of the charge is equally notable: it coincided with Bang being summoned repeatedly as the investigation tightened. Such a results-oriented display of "responsible management" is difficult not to read as a move to secure goodwill and public trust for himself—which leads naturally to the next question: how much trust in the man at the top still remains?

The Collapse of Leadership Credibility

The crisis of confidence surrounding HYBE's absolute ruler peaked in May 2025, when the Korean police formally requested a pre-indictment arrest warrant for Bang Si-hyuk on charges of fraudulent unfair trading under the Capital Markets Act.

According to investigative reports by Korean networks SBS and MBC, authorities received a whistleblower report at the end of 2024. The investigation alleges that in 2020, on the eve of HYBE’s (then Big Hit) IPO, Bang Si-hyuk deliberately concealed the impending public listing. Either personally or through proxy executives, he allegedly fed false information to early venture capital firms and legacy shareholders, insisting there were no IPO plans. Believing these misrepresentations, a large number of early investors liquidated their highly valuable original shares at rock-bottom prices, selling them to a private equity fund closely tied to Bang’s personal inner circle and assistants.

Crucially, Bang Si-hyuk allegedly executed a clandestine shareholder agreement with this private equity fund. The secret clause dictated that upon listing, 30% of the capital gains generated from dumping the stock at its peak must be covertly kicked back to Bang Si-hyuk personally. Immediately following this share transfer, Bang fast-tracked HYBE's IPO that same year. The private equity fund executed a precision exit at the stock's all-time high, allowing Bang Si-hyuk to pocket an estimated 200 billion KRW in illegal, fraudulent profits through this secret covenant. Subsequently, approximately 156.8 billion KRW worth of HYBE shares linked to Bang's alleged crimes were placed under a pre-indictment asset freeze, and he has been subject to a travel ban.

With executive infighting, the imminent arrest of the majority shareholder, and massive paper deficits exploding simultaneously, trust in both Bang Si-hyuk and HYBE has reached a perilous cliff for both internal staff and external markets.

Conclusion

As a publicly traded company with a market capitalization exceeding 8 trillion KRW, HYBE's short-term deficit does not signal an immediate financial collapse. Instead, HYBE is facing three distinct crises:

1. A discount on profit quality driven by frantic structural and market shifts, resulting in record revenues masking massive net deficits.
2. The erosion of investor trust as the criminal investigation into Bang Si-hyuk drags on.
3. The aggressive pre-pricing of valuation expectations; the market already priced in the BTS comeback premium during the January stock peak, meaning HYBE now desperately requires real, realized profit margins to sustain its valuation.

Therefore, the core dilemma for HYBE is not "whether it is prosperous," but "whether that prosperity can ever be converted into actual net profits for shareholders." This is the true economic logic behind the stock price collapsing from its four-year high to below 200,000 KRW.To return to the question fans care about most: If we assume the worst-case scenario where Bang Si-hyuk is convicted and imprisoned, how will it affect HYBE and its artists?First, BIGHIT MUSIC—the direct lineage housing BTS, TXT, and CORTIS—will suffer the least operational disruption.

Conversely, among the acquired labels, PLEDIS Entertainment—whose corporate shares were previously put up by the parent company as bank collateral—will suffer the most catastrophic blow, leaving it deeply entangled in the legal nightmare of bankruptcy asset liquidation.But what is PLEDIS's current situation? Its primary engine, SEVENTEEN, despite facing unavoidable military enlistments, announced a unanimous contract renewal prior to their service. Although it remains unconfirmed whether they have structurally decoupled their group contracts from their solo contracts, the SEVENTEEN intellectual property is secure for at least another 5 to 6 years. Their junior group, TWS, is only two years into a standard 7-year exclusive debut contract, leaving 5 years before renewal friction. If PLEDIS were to face an existential collapse, the first signal would likely be SEVENTEEN members signing their individual contracts with outside agencies, or establishing personal management studios.

Adjusted core operating profit, group contract renewals, the full rollout of touring plans, and surging EBITDA are all signaling the same thing: even in the worst-case outcome of the Bang Si-hyuk case, HYBE's actual condition is considerably better than most people fear.