Since the anouncement of the lawsuit that involves TVXQ and SM, the company stock dropped:
At 9:06 am yesterday, SM stock is worth for 3,715 won fell about 11.02%.
Today Situation (as drawn in the graph):
Stock fell until -10.1%, a loss of 5% on the current value. It’s increase a bit from yesterday, but not much.
Kim Chang-won, an analyst from Daewoo Securities on the August 3rd said, “BoA, TVXQ, Girls Generation, Super Junior, and SHINee are non arguably most important asset of SM. If there’s something happened to one of these 5 main stars, the negative impact to stock price is expected.”
Financial Health of SM
Blue spot > Total assets (ressources/funds)
Purple stick > Total Liabilities (hindrance/puts)
Yellow stick > Total shareholders’ equity
Blue stars > Sales
If you look at the 2008 growth curve and if you do the ratio, we can see that Mirotic album was a breath of air fresh for SM.
Revenue Structure (the most interesting part)
Blue line > Sales
Purple line > Operating profit (EBIT, Earnings Before Interest and Taxes)
Yellow line > Net income (profit)
Can you see the incomes and sales’ increase at the end of 2008? The main artists that were promoted at that time were TVXQ. Don’t you remember all the performances at all end’s year ceremonies? If you were wondering why the members didn’t claim for their rights earlier, now you know.
EBIT (Earning Before Interest and Taxes): company’s earning (sales minus all expenses) excluding effects from interest income/expense and tax.
Net Income: EBIT with the effects of interest and tax.
There is a fair amount of personal opinion from the source. So please don't misunderstand.
Aug. 3, 2009 (Seoul)
**S.M. ENTERTAINMENT SLIDES ON NEWS OF LEGAL FEUD**
S.M. Entertainment Co fell after several media reported on Saturday that members of Tong Bang Shin Gi (TVXQ), a South Korean boy band, filed an injunction in a Seoul court to terminate their contract with the talent agency.
'For investors, it's reasonable to worry over the news, since Tong Bang Shin Gi is one of the major sources of revenue for SM Entertainment,' said Kim Chang-kwon, an analyst at Daewoo Securities.
S.M. Entertainment could not be reached for a comment.
S.M. Entertainment shares fell 10.06 percent to 3,755 won as of 0141 GMT, while the junior Kosdaq rose 0.82 percent.