After aespa Karina confirmed her relationship with actor Lee Jae Wook, the idol continues to receive cold reactions from netizens, with investors blaming her for SM's stock plunge of 67 billion won ($50M).
On February 27, aespa Karina's relationship with actor Lee Jae Wook was exposed by Dispatch. Their fans then showed warm reactions to the news, but the new couple couldn't completely avoid criticisms. Worse, they were even blamed for the repercussions their labels' experienced following the announcement.
SM Entertainment Suffers From 67-B KRW Stocks Plunge After aespa Karina's Dating Announcement
About a week after the singer started seeing the actor, SM's stock price plunged, losing 67 billion KRW or 50.3M USD from its market capitalization just the same day after the dating announcement.
According to the Korea Exchange on the 27th, when they actually admitted to dating, SM Entertainment's market capitalization, which was KRW 1.9232 trillion ($1.45 billion) the previous day, fell to KRW 1.8564 trillion ($1.39 billion) with KRW 66.8 billion ($50.26M) lost, in a single day.
According to analysts and investors, the decisive cause of the plunge in stock price was due to Karina's romantic relationship.
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As an explanation, aespa holds influence that is strong enough to become one of SM's key revenue streams, just four years after their debut in 2020.
According to the Mirae Asset Securities analysts, aespa accounts for 23 percent of SM's performance contribution forecast by the sales group this year. It is second only to the group NCT (45 percent).
As such, issues such as dating and renewal of contracts by artists who are the company's money-earners were a factor in stock price fluctuations due to the nature of entertainment stocks.
K-Media Defend aespa Karina from Analyst Blaming Her for SM's Stocks Plummet
According to the media outlet Dailian, although Karina's dating may also have had a significant impact on SM's stock price fluctuations, they defended the "Next Level" singer and emphasized that it is unreasonable to blame it all on the singer.
They explained that on the same day, other big entertainment companies including YG, JYP, and HYBE recorded a decline in their stock prices.
The media outlet then revealed the true reason for the stock plunge and said:
"The trend was attributed to falling K-pop album sales and unstable demand in the Chinese market. The music sales have declined sharply from the end of last year to January this year.
Based on the Circle Chart, album sales in December last year totaled 4,113,499, down 72.9 percent from the previous month (15,166,889) and 33.6 percent from the same period last year (6,193,032). The record is the lowest in the entire year."
Compared to last year's performance of labels, the first quartet's record of the label showed a significant decrease in album sales, which was caused by the declining exports in the Chinese market, one of the biggest consumers of K-pop.
The media then concluded:
"It is definitely problematic to hold idols accountable for 67 billion won ($50M) just because of a romantic relationship. Before placing the blame on someone, the priority should be to look back on problems across the enterprise market and find solutions."
READ MORE: Is aespa Karina Facing a Fan Exodus After Dating Bombshell? Public Response Revealed
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Written by Eunice Dawson.
