Rain unloads stake in his own company
7/18/2010 12:37:00 AM
kenmouse
, Posted in
Korean singer and movie actor Rain has liquidated all of his management company’s stock, of which he was the largest shareholder. Since the announcement of Rain’s selling of shares in J-Tune Entertainment, his management company, its stock value plunged nearly 60 percent from the end of June.According to sources in the financial industry and the Financial Supervisory Service, the largest shareholder for J-Tune Entertainment is now Won Young-sik after Rain sold all of his 3,507,230 shares, or 4.27 percent of the total, on July 9.
Rain’s sell-off throws into question whether he will sign again with J-Tune Entertainment – of which he is the only signed artist – which is why J-Tune’s stock price has fallen to 270 won ($0.22) from 645 won at the end of last month.
“The stock has lurched in value after the announcement of Rain’s liquidation made the rounds,” said Choi Joon-geun, an analyst at Shinhan Investment Corp. “As Rain’s influence was great in the company’s initial listing, the news understandably had an impact on the stock’s value.”
Rain became J-Tune Entertainment’s largest shareholder in 2007 after he participated in a paid-in capital increase that created the company as well as an over-the-counter acquisition, mounting to an investment of 48.1 trillion won ($39.97 billion).
However, he has steadily sold his shares since June of last year, with what was originally a 14.83 percent stake gradually shrinking.
As Rain is the sole breadwinner for J-Tune Entertainment, his actions will make or break the company. “The future of the company will hinge on whether Rain’s stock liquidation signals a break from the company, or he is simply selling his share,” said Choi. “Since Rain’s contribution to their revenue is so great, his subsequent actions will matter greatly for the company,” Choi said.
However, J-Tune Entertainment maintained that Rain’s sale is simply a financial decision. “There has been no change in our business operations before and since the change [in our largest shareholder],” said Bae Yong-ho, a representative of J-Tune. “Both the company and Rain are trying our best.” Rain’s current contract with J-Tune is due to terminate in October 201.
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