BLACKPINK’s Contract Renewal Worries Are Hurting YG Entertainment’s Shares.

All concerns about BLACKPINK’s contract renewal have been met with “Nothing has been confirmed yet” from YG Entertainment for months. Despite stock price fluctuations due to public speculation over contract renewal and Jennie and Jisoo’s independent agencies, YG Entertainment remains ambiguous. A typical public-traded corporation may struggle with ambiguity about a contract issue for months.

YG Entertainment’s stock fell for the fourth straight day on September 25 to 65,500 won. Due to alarming news of BLACKPINK’s contract renewal and Jennie and Jisoo’s independent agencies, the stock price fell 18.43%. Investors disagree with YG’s passivity.

The company also lacks confidence. Foreign investors sold shares in large numbers in September, lowering the foreign ownership rate from 18% to 15%. Foreigners sold 39.2 billion won during this time. National pension funds sold 21.5 billion won. These numbers show institutional investors’ growing financial concerns about YG. However, individual investors ibought 20 billion won of stock during this uncertainty.

YG values BLACKPINK as an asset and intellectual property, hence they may not release all contract negotiation specifics. However, their inaction to the disclosed information and stock price instability indicates a serious security breach. In light of their roughly 20% stock price reduction, management’s statement that ‘nothing has been determined’ shows irresponsibility towards shareholder value.

“The stock price was temporarily re-evaluated due to perceived improvements in entertainment management structures,” said an expert. The old structure still applies to YG’s administration of BLACKPINK. The contract-renewal dispute could hurt K-entertainment market pricing.