SM Entertainment continued to plunge in market capitalization when the market opened on Monday, October 13th.
2014 has been a year plagued with scandals and bad news. This has not only taken a toll within the entertainment world, but within the financial world as well.
On October 10th, SM Entertainment stocks dropped and halted in trading due to the shocking news of EXO-M’s Luhan filing a lawsuit against them. These news came only after 11 days since Jessica’s departure from Girls’ Generation was announced, which had already caused a negative effect in stocks.
In order to paint a better picture, SM Entertainment began its day on October 10th with a market capitalization of 756.76B, before the news of Luhan broke out. They then ended the day with a market capitalization of 655.23B. Stocks were halted at around 1 p.m (KST) because they had reached their cap of 15 percent.
This is because KOSDAQ, the trading board of Korea exchange, does not allow companies to go higher or lower than a 15% change in a day. On the 13th, matters did not get any better for SM Entertainment who closed the day with a market capitalization of 559.57B. Furthermore, SM Entertainment was dangerously close in reaching the cap this day as well. The lowest point of the day was a 14.42% drop but they closed the day with only a 13.14% drop.
This year SM Entertainment had to deal with the news of EXO-M’s Kris filing a lawsuit and leaving the group as well as f(x)’s Sulli’s dating scandal and her hiatus from the group. It is to be noted though that SM Entertainment was not the only big company to experience a loss. JYP and YG both dropped 6.73% and 8.99% respectively.
This drop could be contributed to the fact that MBLAQ’s Lee Joon and Thunder announced on October 13th around 11 a.m (KST), that they would be leaving the group since their contract expired. Near that time SM had a drop of only 8% and then continued to drastically decrease.
YG Entertainment had it’s own share of scandals this year which included Park Bom’s drug scandal, Seungri’s car accident, and G-Dragon’s relationship rumours with Kiko. Earlier in the year, JYP had also had to deal with allegations of an illegal influx of funds to which they have strongly denied.
Soon, the market will open again for Tuesday October 14th in Korea. What do you think will be the fate of these three companies along with all the other entertainment companies in the stock market? Do you think SM Entertainment can recover it’s losses before the end of this year?
Source: Google Finance