Naver is preparing to heavily invest in SM Entertainment, with plans to invest around ₩100 billion KRW ($83,077,240 USD) into the K-Pop giant.
According to an exclusive report from Hankyung on July 20, Naver and SM Entertainment are in the process of negotiating a deal that will see a capital increase via the issuing of new stocks for a third party.
Naver and SM Entertainment signed an MOU in April to jointly promote their global business, and Naver is seeking to secure a stake in SM Entertainment.
Industry insiders estimate the investment will be ₩100 billion KRW, which is the same amount Naver invested into YG Entertainment in 2017. Using the price of SM Entertainment’s stock as of the markets closing, this would amount to 12.64% of SM Entertainment shares, making Naver the second largest shareholder behind Lee Soo Man, who holds 18.73%.
Naver plans on using SM Entertainment’s IP (intellectual property) to strengthen its own contents. An insider shared why they believe Naver is investing even more heavily into SM Entertainment.
In April 2020, BTS held an online concert through YouTube, not through Naver’s V Live. They earned at least ₩25 billion KRW ($20,769,310 USD) in revenue from 756,000 ticket sales.
Naver, which lost K-POP’s most popular IP in BTS’s, must have felt the need to invest into SM Entertainment to construct a stable relationship.