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| ▲This photo, shows, Lee Soo-man giving out his speech at GICC. (Yonhap) |
SEOUL, September 16 (Yonhap) -- The announcement regarding the early termination of the procuring contract between SM Entertainment and Lee Soo Man’s individual company Like Planning is positively affecting the cost of SM Entertainment’s stock price on Friday morning.
According to the data collected from the KOSDAQ, Korean Securities Dealers Automated Quotations, market on Friday at 9:12 a.m., a single stock of SM Entertainment was being traded at 72,700 won which is 12.71 percent higher than the price recorded on September 15.
Like Planning is a personal business created by SM Entertainment’s executive producer Lee Soo-man which signed a producing contract with SM Entertainment and received fixed amount of royalty based on SM Entertainment’s sales. The total amount of loyalty received within the first half of 2022 by Like Planning exceeds over 11.4 billion won
Align Partners Capital Management which owns 1.1 percent of SM Entertainments share, described that SM Entertainment’s act of giving their work to single company tainted the value of SM Entertainment’s shareholders. Therefore Align Partners Capital Management sent a copy of shareholder’s epistle on August 17 asking SM Entertainment’s resolution on existing problems related to the contract signed between SM Entertainment and Like Planning by September 15”
“Executive producer of SM Entertainment, Lee Soo-man showcased his intention of terminating the contract between Like Planning and SM Entertainment earlier than its contractual period.” announced SM Entertainment through a statement released on September 15.
Security firms have increased the target stock price of SM Entertainment simultaneously.
Hana securities expected the termination of contract will bring additional 30 billion won to SM Entertainment’s operating profit; therefore they have increased their target stock price from 105 thousand won to 110 thousand won.
Moreover, Hanwha securities increased their target stock price from 91 thousand won to 103 thousand won under the assumption that through the termination of the contract it untangles some of the discounting factors caused by noise based on the governance.
Continuing on Shinhan securities increased their expected stock price of SM Entertainment from 93thousand won to 100 thousand won.
(This article is translated from Korean to English by Joonha Yoo)
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