South Korea’s largest K-pop agency loses $423 million in value as girl group NewJeans set to part ways

South Korea’s largest K-pop agency Hybe lost over $423 million in market cap on Friday after rookie group NewJeans announced it was terminating its contract with Hybe sub-label ADOR.

The announcement, which follows a months-long management dispute between ADOR and Hybe, sent the company’s shares plunging as much as 6.97% on Friday.

The five-member girl group, formed in 2022, said in a press conference late Thursday that it was leaving the agency, claiming ADOR had breached its contract with the band.

“Staying here would be a waste of time and would only bring pain, mentally,” group member Hanni said.

“There is nothing we can gain professionally from staying here, so the five of us see no reason to remain at ADOR,” according to a translation by South Korean media outlet Yonhap.

Two weeks ago, NewJeans had sent a legal notice to Hybe with a list of demands, including reinstating former ADOR CEO Min Hee-jin, failing which, the group members threatened to terminate their contracts.

South Korean media outlet JoongAng Ilbo had also reported that the list of demands included “dealing with” a Hybe internal report that said to “get rid of NewJeans and start anew.”

Hanni also said there was “mistreatment not just toward us but also toward our staff, countless preventions and contradictions, deliberate miscommunication, and manipulation regarding multiple areas.” She did not elaborate further.

Hanni had reportedly testified to South Korea’s parliament in October, claiming she had experienced workplace harassment at the label.

“This is not the type of work ethic we respect nor want to be a part of, and to continue working under a company with no intention of protecting NewJeans would only do us harm,” she said at the press conference.

In April, Hybe accused then ADOR CEO Min Hee-jin of attempting to take the sublabel independent.

Min had denied the allegations and denounced Hybe, saying they had copied the concept of NewJeans to use in another girl band under a different Hybe subsidiary.

Min stepped down as ADOR CEO in August, but remained as a director of the company, before resigning from that position as well on Nov. 20.

The group has become one of K-Pop’s most popular faces when it debuted in 2022, winning numerous accolades at South Korean award shows. In 2024, NewJeans had also won the Group of the Year Award at Billboard’s Women in Music ceremony.

Billboard’s citation said the group scored entries across 10 Billboard charts, including the Billboard Hot 100, Billboard 200, and Billboard Global 200. 

Hybe net profit plunged nearly 99% year on year in the third quarter of 2024, with analysts saying sales shrank due to limited artists and activities during the 2024 Olympics, while profitability was also hurt by higher costs owed to the launch of KATSEYE, a localized group in the U.S.

Hybe shares have lost 15.72% so far this year amid a wider downtrend in the industry, with all of the “Big Four” K-pop agencies seeing shares drop.