Alphabiz - JYP Entertainment Faces Shareholder Backlash Over Lack of Treasury Share Cancellation

Park Jin-young. (Photo=JYP Entertainment)

[Alpha Biz= Paul Lee] JYP Entertainment is facing growing shareholder criticism as its stock remains under pressure while the company has yet to announce any treasury share cancellation plan, despite recent revisions to commercial law encouraging such measures.

The company’s share price has declined significantly from KRW 85,000 in November last year to below KRW 60,000 in early April, reflecting continued weakness despite broader market recovery. While shares rebounded slightly on April 8, closing at KRW 61,200, investor sentiment remains subdued.

Following the passage of a revised Commercial Act in February mandating stricter handling of treasury shares, many listed companies in South Korea have moved to cancel shares to enhance shareholder value. According to the Korea Exchange, over 100 companies announced treasury share cancellations in March alone, totaling approximately KRW 15.8 trillion.

However, JYP Entertainment has maintained its existing stance without committing to share cancellation. Treasury shares account for about 6.75% of its total outstanding shares, while the controlling shareholder group—including founder Park Jin-young—holds roughly 15.82%.

Park recently stepped down from his role as an internal director after 15 years, distancing himself from direct management responsibilities. He currently serves as co-chair of a government cultural exchange committee.

Although the company doubled its dividend per share to KRW 877 for fiscal year 2025, the dividend yield remains modest at around 1.4%, and the increase has not been sufficient to offset the stock’s decline of approximately 30% since November.

Market observers note that dividend-focused shareholder returns alone may be insufficient to address valuation concerns. Investors are increasingly calling for more decisive capital management measures, including treasury share cancellation, to improve shareholder value and restore confidence.

Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)