SM Entertainment has officially addressed the recent rumors regarding a potential sale and management change.
In a statement, SM clarified that these rumors are completely unfounded. They want to assure fans and stakeholders that there are no such plans in motion.
On February 5, SM Entertainment released an official statement addressing the rumor about Kakao selling to SM. They stated that the rumor, which had been widely reported by various media outlets, was deemed untrue according to Kakao’s announcement on January 29, 2024.
Additionally, despite media reports suggesting a potential change in SM’s management, SM has communicated with Kakao and confirmed that there are no plans for a management change.
At the same time, SM made it clear that they are currently maintaining a close business partnership with Kakao, as well as Kakao Entertainment, with the shared goal of fostering growth and creating mutual synergy.
Furthermore, SM expressed their concern about the unfounded speculations and rumors that have been circulating since November 2023.
These speculations, often based on various media reports, have had a detrimental impact on SM’s corporate image. In response, SM has provided a brief statement clarifying their position on several matters.
In regards to SM’s investment in KMR’s business division, 10x Entertainment, SM clarified that 10x Entertainment has been involved in content production. They explained that 10x’s artist, Kim Woojin, was a former SM trainee and a member of Stray Kids. Based on their assessment of Kim Woojin’s potential for future growth, KMR decided to provide discounted cash flow (DCF) for support.
SM further announced that the acquisition of 10x will enable them to have a label that nurtures various artists, including Kim Woojin, and leverage their production capabilities to promote a range of domestic and international projects in the music industry.
Last year, Kakao acquired a significant stake in SM, becoming the largest shareholder with a 39.87% stake. However, there were some complications during this process.
Bae Jae-hyun, the head of Kakao’s investment, was arrested and indicted on charges related to manipulating SM’s stock prices to prevent HYBE’’s tender offer. This incident raised concerns about the possibility of SM being sold and management being replaced.