Many are paying attention to whether YG shares, which have been on the decline since "Seungri gate", will set the stage for a rebound after Yang Hyun Suk, YG's chief producer resigned.
According to the Korea Exchange, YG shares that saw a 5.60% drop after iKON B.I's withdrawal and rebounded 5.42% at one point in after-hours trading on Friday. In other words, the stock almost recovered from the fall on the same day. Yang Hyun Suk's resignation seems to have played a "positive" role in investor sentiment.
Yoo Seong-man, a researcher at Hyundai Securities Co. stated, "With the resignation of CEO Yang Hyun Suk, YG is able to distance itself from various suspicions and controversies related to him."
Some analysts, however, are warning that YG's corporate fundamentals may have been affected this time compared to "Seungri-gate" previously. The biggest source of revenue for most entertainment agencies is concert attendance and with B.I's leave from iKON, YG's concert revenues are expected to take a hit. According to Nikkei Entertainment's rankings, iKON mobilized over 227,000 last year, ranking 5th among K-POP artists and No. 1 among YG-affiliated artists. Revenues from iKON concerts accounted for 53% of YG's concert revenues. This year, BLACKPINK will likely take the No. 1 spot as they're growing rapidly but iKON remains YG's main supporting artist since BIGBANG's enlistment.
Member B.I (Kim Han Bin) is also a main source of revenue for the label. He's the main producer and leader of iKON and participated in composing the group's many hit songs including 'Love Scenario', 'My Type', and 'Rhythm Ta.' iKON's brother group, WINNER, also can't rule out the possibility that Lee Seung-hoon may have a setback in activities due to his involvement in concealing B.I's drug scandal.
Considering that YG has been a one-man centered system where main producer Yang Hyun Suk directly decided content production, including finding/nurturing trainees, and music video production, his resignation could destabilize the company's overall operations for a while. On top of this, the National Tax Service [NTS] special tax probe into YG and the police's investigation into Yang Hyun Suk and B.I, it's like we'll have to wait and see if YG's stock price will recover.
Researcher Yoo Seong-man stated, "Seungri had no performances scheduled this year as he planned to enlist. ButB.I's withdrawal will greatly affect YG's major revenue sources as he was a key member of iKON. As long as uncertainties of the tax audit remain, investors have to maintain a cautious approach until this situation is concluded."
Translation Credit: Daily Naver