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Will This Bubble Go K-Pop?

The IPO of Big Hit Entertainment, the music label that represents boy band BTS, was oversubscribed by about 600 times. Shares will start trading next week.



By almost any standard, the level of enthusiasm for

Big Hit Entertainment

was extraordinary.

But this is South Korea, and the music label that represents red-hot boy band BTS was expected by some to see record demand from retail investors in its initial public offering this week. The shares on offer were oversubscribed by about 600 times. With investors required to put down half their subscription as a deposit, brokers were temporarily left holding $50 billion, some of it borrowed. That was enough to cause ripples in the country’s financial system.

As impressive as that sounds, investor demand failed to match that for game developer

Kakao Games,

293490 -2.75%

which was more than 1,000 times oversubscribed last month.

K-Pop is a huge phenomenon and many fans of the band, who call themselves ARMY, put up money for sentimental rather than financial reasons. If the shares, which start trading on Oct. 15, match Kakao’s performance then fans and speculators alike will feel like dancing—they now fetch 53,000 won, equivalent to $45.98—more than double their offering price of 24,000 won.

The stock market is no videogame, though, and past performance might not be indicative of future results.

Write to Spencer Jakab at

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