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BTS ahead of its full-group comeback scheduled for March. (Photo courtesy of BigHit Music) |
[Alpha Biz= Kim Jisun] HYBE’s share price has been gaining momentum on growing expectations surrounding BTS’s full-group comeback, prompting a wave of conversion exercises on the company’s convertible bonds (CBs).
According to the investment banking industry on January 18, a total of KRW 2.355 trillion worth of HYBE’s CBs were converted into shares over the past three months, from October 17, 2025 to January 16, 2026. This represents more than half of the KRW 4 trillion in CBs issued by the company.
The CBs were issued in October 2024 with a total size of KRW 4 trillion and a conversion price set at KRW 218,000 per share. At the time of issuance on October 17, 2024, HYBE shares closed at KRW 192,100. Since the second half of last year, the stock has climbed sharply, surpassing KRW 300,000 in late October and reaching a high of KRW 346,000 on January 2.
Both the coupon rate and yield-to-maturity on the CBs were set at 0%, underscoring that the investment was driven purely by expectations of share price appreciation. The bonds carry a five-year maturity, expiring on October 17, 2029.
At issuance, Mirae Asset Securities acquired KRW 3.9 trillion worth of the CBs, while Mirae Asset Capital purchased the remaining KRW 100 billion. Mirae Asset Securities subsequently sold down most of its allocation to institutional investors.
On the first day conversion became available, October 17 last year, conversion rights worth KRW 972 billion were exercised in a single session. Market observers believe investor sentiment at the time was focused on avoiding potential losses rather than betting on further upside. However, with HYBE shares recently trading above the KRW 300,000 level, investors who converted later are estimated to have secured substantial gains. Even a sale at around KRW 330,000 after conversion would imply returns exceeding 50%.
Mirae Asset’s involvement with HYBE dates back to November 2021, when HYBE—then riding strong momentum from BTS’s global popularity—issued CBs under highly favorable terms, including zero interest rates and no refixing provisions. However, HYBE shares fell to the KRW 150,000 range by September 2024, prompting many investors to exercise early redemption rights, as the bonds offered no interest income and equity conversion was unattractive at the time.
HYBE subsequently refinanced the KRW 4 trillion in CBs amid concerns over refinancing risk and limited visibility on share price recovery. Those concerns have eased recently, as optimism surrounding BTS’s return has coincided with a broader rally in the Korean stock market, with the KOSPI approaching the 5,000 level.
Reflecting these developments, several securities firms have recently raised their target prices for HYBE shares.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
