HYBE has decided to divest from SM Entertainment by selling all its shares to Tencent Music Entertainment in an effort to recoup its initial investment. The Financial Supervisory Service's electronic disclosure system revealed that HYBE plans to finalize the sale of its remaining stake in SM Entertainment by the end of this month. HYBE initially invested in SM Entertainment in 2023, acquiring around 15% of the company's shares from Lee Soo Man. However, due to intense competition with Kakao, HYBE decided to withdraw its bid and sold approximately half of its shares to Kakao.

With Kakao becoming the largest shareholder of SM Entertainment, HYBE's influence on management diminished significantly. The sale of a portion of its stake in May 2024, followed by the planned sale of the remaining shares to Tencent Music Entertainment, aims to mitigate this situation. The sale to Tencent Music Entertainment includes a discount compared to the previous day's closing price, reflecting the lack of management control and TME's position as the third-largest shareholder.

The total return from HYBE's investment in SM Entertainment is estimated to be slightly higher than the initial investment amount. This divestment aligns with HYBE's strategy to concentrate on its core business areas and utilize the funds for future growth opportunities. This move has generated discussions among Korean online users, with many expressing interest and varied opinions on Tencent Music's involvement in SM Entertainment's ownership stake.