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So many thoughts running through my finance mind https://twitter.com/tmikpop/status/1328518082319572992
FINE, YOU BULLIES 
1. looking at SM, it seems they pushed really hard to make more revenue this quarter - perhaps to show they could compete with BH? - but they are still at a net loss, meaning they made no money. they made -9.7 BILLION won. fuck me, that's sad. i speculate+
1. looking at SM, it seems they pushed really hard to make more revenue this quarter - perhaps to show they could compete with BH? - but they are still at a net loss, meaning they made no money. they made -9.7 BILLION won. fuck me, that's sad. i speculate+
this is either bc it cost them a LOT to make the extra revenue (eg. higher production costs for albums or to host an online concert or other projects), which seems like a poor business choice. or they have some high debt on their books with a very painful interest exp +
or they reevaluated something in their business & realized they couldn't make as much money that way (eg. the way i
had to write off ad revenue bc companies weren't promoting as much). Any of these 3 scenarios suck for the company & smell of bad business mgmt +
had to write off ad revenue bc companies weren't promoting as much). Any of these 3 scenarios suck for the company & smell of bad business mgmt +
2. YG made a lot of profit to only be keeping so little of it... Their profit margin is less than 5%??? That's fucking terrible in my opinion. Googling it, looks like margin should be something like 20-28% based on the last 10 yrs... I know we're in a pandemic but 5%??? oof +
This tells me they have a lot of expenses eating away at their revenue for potential reasons similar to what i said for SM. Tho it's not as egregious as SM,YG's 5% op margin is just...dinky. Did the cost of producing/distributing the BP documentary come in higher than expected? +
Is the cost of dealing with company lawsuits for all the criminal scandals they've had weighing them down? Is G-Dragon demanding more money in his salary as he practically carries that limping company? Who knows. The answer would be in their financials but i'm too lazy to look+
3. JYP has a MUCH healthier operating margin: 32.1%! Good job, JYP. They've made less revenue than SM/YG but they've also kept a lot more of the money they've made. This tells me they are shrewd in their business decisions and prefer to pursue more surefire ways of making money+
even if it doesn't earn them as much in the short term. But this kind of conservative business strategy makes a trustworthy company you can reliably invest in. Doesn't hurt to have more than one successful group with loads of content either (eg. Twice, Itzy, Got7, etc) +
4. And at last, we come to the star of the show: Big motherfuckin' Hit. At 21.2%, BH's op margin is lower than JYP's to be sure but they're also bringing in 190 BILLION won. Holy fuck. They've outpaced EVERYONE- The closest agency is SM with 115b won but they're making a loss +
so what kind of competition is that really? virtually none. Bah, I wish I had the last couple quarters as comparison so I could see if BH's trending up or down or flat over time in terms of revenue/margin. Alas I don't know this but from what I've seen before, I think they +
have really demonstrated that BH is a sustainable, reliable, powerhouse company to invest in. That's been their whole goal so that they could have a successful IPO (And boy, did they). Their business strategy is also quite different from what I know of the other agencies, +
not to mention the massive buying power of a loyal, devoted fandom like ARMY. If BH continues to provide quality content, they will have ready and willing consumers in the form of us fans. This is BH's first quarter as a public company, is it not? Do we have a full set of +
financials for them in English? I'd love to get my hands on those...
I've been meaning to make a video on why I love BH's business strategy but alas, life has gotten in the way more times than I can count.
I might be more motivated if someone finds me some BH financials tho :D
I've been meaning to make a video on why I love BH's business strategy but alas, life has gotten in the way more times than I can count.
I might be more motivated if someone finds me some BH financials tho :D
