SM Entertainment Stock Drama: A Primer
Feb. 7th, 2023 07:05 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
boulevarddoubleHi Friends! It's "Caro finally uses her dreamwidth" time again!
Today's primer is a little different. Rather than a group, I wanted to gather all my thoughts, currently spread across several twitter threads, on the SM Entertainment Stock Drama into a single post.
Especially since we have no idea when twitter will die or just, you know, decide to stop threading things or something.
Why should you care about the SM Entertainment Stock Drama?
Well, much like every other company (Twitter being a great example), product direction starts with the vision of the leadership. For years and years, that has been Lee Soo Man, henceforth known as LSM. While he hasn't been the CEO, he has been the largest shareholder (aka stock owner) and has also had the biggest hand in the company's creative direction due to his ownership of their production company Like Planning.
In the last two years, however, his power and influence has been eroded bit by bit, until we find ourselves viewing the situation that unfolded today, where it was announced he is suing his own company.
Now, you should also be asking "why do you care so much Caro? And how can we trust your analysis?"
The first answer is easy: I'm a giant fucking nerd for this shit.
The second answer is less so. While I don't work in finance or law, and very specifically do not work in Korea or am familiar with Korean laws, I do work in Marketing and have spent the majority of my career in corporate spaces. I study the way people make decisions and the way people/media talk about decisions as a part of what I do for a living.
My philosophy about CEOs, especially those like LSM who are known as giants in their field, is "they will go where their ego leads." We're seeing this with the recent Twitter acquisition and, importantly, we're also seeing this play a large role in the SM Stock Drama.
This primer will be both a collection of facts and some of my own personal speculation. I will do my best to call out when I am being speculative, though feel free to ask me questions in the comments.
Part 1: LSM wants to sell his stock. Or doesn't!
Okay, so this drama starts all the way back in the summer of 2021. In june of 2021, LSM announce that he would be selling his stake in SM Entertainment.
This was huge news, for several reasons. First and most obviously, LSM is a legend. And not always for positive reasons (tax evasion anyone?). However, there's no doubt that his leadership helped make SM Entertainment what it is today -- the second largest entertainment company after Hybe. (We will come back to this.)
Second, this would cause a massive shift in the power balance at SM Entertainment. While LSM resigned from the board of directors and CEO in 2010, he still held largest share of the company, at 18.7%. This was leaps and bounds higher than the next largest shareholder, at just ~4.5%. The majority of SM Ent's shareholders owned 1% or less of SM stock.
At nearly 19%, this meant that LSM had a huge amount of sway over the direction of the company, regardless of whether or not he was the CEO. As a rule, a company's board of directors, including the C-suite (CEO, CFO, anything with "chief" in the title), are elected by the shareholders with votes being proportional to the number of shares one owns. Not every company is set up exactly this way, but it's common.
And, speculatively, it probably has a lot to do with why one of the current co-CEOs is LSM's nephew.
Back to facts. In August of 2021, it was reported that three entertainment companies were in the running to purchase LSM's shares. The first was a dark horse candidate: CJ Entertainment. You probably haven't heard of them, however they are one of the largest movie and production companies in Korea and you may have heard of their vice chair - Miky Lee. CJ Entertainment also earned some global fame as the production company behind a little oscar-winning film called "Parasite".
The second company in the running you definitely have heard of: Hybe. According to reports, Hybe's offer was serious and larger than the other contenders, but was rejected by LSM. (Speculatively, he would never let the company beating him at his own game basically acquire the company he built. Ego!)
The third company will be a key player in this story: Kakao Entertainment. According to the same Soompi article (and please note, most of these kpop sites are rehashing articles written by Korean business journals), they offered to purchase his stocks for approximately $2.2 billion dollars, however this deal never came to pass.
In fact, Lee Soo Man never sold his stocks at all.
In October of 2021, SM Entertainment shut down rumors that CJ Entertainment was finalizing a deal. And then on March 11, 2022, Kakao Entertainment stated they were not purchasing LSM's stock.
All this hullabaloo begged the question: If LSM had no intention of accepting serious offers, why go through this exercise?
I believe it has everything to do with this second part of the story.
Part 2: Align Partners versus Like Planning. Fight!
To set the scene. Heading into 2022, everyone believed LSM was going to sell his stock and essentially retire. So when Kakao broke the news they were not purchasing his stock, it was surprising. However, 20 days later, an even bigger shockwave rippled through SM Entertainment.
On March 31st at a general shareholder meeting, a coalition of minority shareholders (i.e., those with smaller stakes in the company than LSM), appointed a third-party auditor to review SM Entertainment's financial activities.
This charge was led by our story's main antagonist, Align Partners.
Align Partners, a multi-industry investment firm, has recently been described as an "American-style shareholder activist firm". What does that mean? Well, given a lot of what I've been reading has been translated by kpop-first reporting or by me using the infallible Google Translate, my best guess is they mean an aggressive, profit-first, venture capital-esque investment firm. (Note: Align Partners is not a VC, however many of their statements read like they could come from a VC.)
The auditor was charged with thoroughly investigating SM Entertainment's finances, especially with respect to how LSM himself has been paid. Align Partners (AP) alleged that prior auditors had all had close ties to SM Entertainment, making their reports ambiguous. They also claimed that the over-payment of LSM had damaged the company's market value, and therefore, made less profit for the shareholders.
These claims were particularly shocking because SM Entertainment had just reported record revenues from 2021. However, the operating income (i.e. profit) had been negative in 2020, and generally all over the map prior, lending them more weight.
But what does this have with LSM? How is he being over paid when stocks are all worth the same?
Enter Like Planning.
Like Planning (LP) is a privately-held production company that had an exclusive contract to produce all creative content for SM Entertainment. This included music, video, web content, etc. And privately-held meant it was under the opaque control of its owner, not required to share any financial documents or details of how its owner -- namely one Lee Soo Man -- was paid.
So to recap, heading into 2022, LSM not only owned the largest share of SM Entertainment stock, but was also the owner of the only production company SM was allowed to use. This means LSM was getting paid out twice on the same work. Once by SM Ent paying Like Planning and once on any stock dividends.
I want to be clear on one point: It is unlikely any of this is illegal. There were contracts, there were lawyers, I'm sure everything was gone over with a fine-toothed comb. However, it does push the bounds of business ethics as the man with the largest controlling interest (and who was, until 2010, the CEO) is absolutely able to steer the direction of who is given these exclusive contracts. And, reductively, he awarded one to himself.
It's important to point out that the famous "SM sound" is a direct product of Like Planning. LSM's creative vision was channeled through that company, and again, had a huge influence on not just SM Ent, but the Korean entertainment scene as a whole.
In August of 2022, this came to a head, with Align Partners pointing out the clear conflict of interest between LSM owning both the majority share and LP. They insisted the board of directors move on resolving this conflict of interest and terminate the contract with LP.
They stated:
"SM paid 11.4 billion won, equivalent to 30% of its operating profit, as a commission to Like Planning in the first half of this year, and did not mention the contract issue with Like Planning."
30%! of operating profit! Going directly back to Lee Soo Man's private production company!
The profit section is key here. While there isn't much talking about the contract structure with LP, paying a commission on operating profit means that LP is getting paid almost like a shareholder itself. Speculatively, I suspect that LP was also be being paid for services rendered (the production aspect), which would be considered an operating expense, making this commission a cherry on top. Again, likely nothing illegal, this is pretty common in entertainment, the issue is the conflict of interest.
Is Like Planning being paid a fair market rate when considering experience and results? Has SM Entertainment lowered the value to stakeholders by not shopping around for other cheaper or more cutting edge production companies?
This wasn't the first time LP had come under fire, either. In 2019, the (then) second-largest shareholder, KB Asset Management made a similar claim that SM's contract with LP was diluting value and that the two companies should merge.
AP gave the board of directors until September 15, 2022 to come up with a "reasonable and specific" plan to resolve this contract issue or else they would take legal actions to protect their rights as shareholders.
And on September 15th, the board of directors caved, announcing they would review what it would take to terminate the contract with Like Planning. Then, a month later, they confirmed that the contract would end on December 31, 2022 -- a year earlier than originally specified.
We leave 2022 on the perfect definition of compromise. LSM is still the majority shareholder but he'll no longer be getting double paid, because Align Partners got the contract canceled. Everyone's grouchy, but progress is being made.
So how do we get from here to Lee Soo Man suing his own company?
Part 3: A new era at SM Entertainment. Betrayal!
Turns out Align Partners wasn't done.
On January 15th, it was announced that following a recommendation from AP, SM Entertainment would increase their board of directors from four seats to seven, with the three new seats being assigned to people/entities who were specifically non-employees of the company.
This move was touted as being part of a larger move to improve diversity on the SM Entertainment board and to provide greater transparency into the dealings with their subsidiaries and other companies. Once again, AP alleged that the current board had recklessly spent profits, approving investments into other entirely unrelated and unprofitable businesses such as wineries.
Two guesses as to who was being tapped as one of the outsiders, and the first one doesn't count.
This move garnered the attention of the broader Korean business world, however, and not necessarily in a positive light. In one Naver article, this headlined (translated by google) as a "shareholder rebellion". Now, Naver doesn't particularly have any loyalty to LSM himself, nor does the business world at large. However, if AP was successful in replacing the board of directors -- which they appeared to have a large coalition backing them -- it could have ramifications for other Korean companies.
If you're a fan of any Kdramas, you've probably heard of the term "chaebol". Historically, it has been common for large corporations to be held in the hands of a single family for generations. Corporations, i.e. businesses that sell stock and are publicly-owned, are supposed to be beholden to the shareholders that "own" the company. In practice, however, these chaebol-style businesses have more often served to enrich a single family. (This is obviously not unique to Korea, it's just a little more overt.)
By staging this "American-style" shareholder rebellion, Align Partners is setting the stage for other investment firms to successfully take on the "established" and entrenched ownership.
This January 15th announcement was swiftly followed by another on the 23rd, which is where this story starts to get even spicier. The current board of directors accepted the proposal to increase the number of board members, and formed a committee to make recommendations on who those three members would be. One third of this committee is current co-CEO Lee Sung Soo (aka Chris Lee)... Lee Soo Man's nephew.
Not only that, but they announced that they would be spending 20% or more of operating profits on shareholder dividends or to buy back stock over the next three years, and that they would be revealing plans to restructure the entire company.
Align Partner's rebellion was a success.
On February 3rd, the co-CEOs, Lee Sung Soo and Tak Young Joon, announced the restructuring of the company in a 21-minute video on YouTube. In short, SM 3.0 will look similar to JYP's "division" strategy, with five separate production divisions which should both increase artist output and provide better and clearer creative direction and management.
Personally, I think this is a good move for the company, though it's going to be a feat of change management to pull it off, and I don't have high hopes for any company's ability to do that.
By capitulating to Align Partners' proposals and by putting together this clear strategic plan for how to proceed without Like Planning at the creative helm, Lee Sung Soo and Tak Young Joon probably saved their jobs.
Then, on February 7th, it was announced that the board had issued new shares and sold them to Kakao Entertainment (remember them?), giving them a 9.05% stake in the company and making them the new second-largest shareholders.
Anonymous employee feedback on the new direction has been largely positive. With one notable exception: long-time SM artist Kim Min Jong expressed his frustration that Lee Soo Man, who had steered the company up until now and was still the majority shareholder, had been completely cut out of the process.
And of course, he wasn't the only one upset by LSM's lack of involvement.
Hours after the Kakao announcement, in a statement from his legal representatives, Lee Soo Man announced his intention to sue the board for "illegal business practices".
The important quote is this:
"On January 20 of this year, SM Entertainment’s co-CEOs Lee Sung Soo and Tak Young Joon agreed to Align Partners’ proposal without consulting Lee Soo Man, the largest shareholder in the company. This action thus further increased the tension and management disputes between the company and the largest shareholder, Lee Soo Man.
It is clearly a violation of commercial law and the articles associated with the law for SM Entertainment’s board of directors, which is led by the co-CEOs, to issue new shares and convertible bonds to third parties at a time when there is such a dispute within the company."
Now, that is all the facts I have. So it's speculation time. Once again, I am not an expert or anything like it in Korean law. However, I would highly doubt this is a "clear violation" of commercial law. This statement reads like LSM - who is no longer a decision-making entity outside of voting for who belongs on the board, which happens in March - is simply angry he's been effectively pushed out of the company he built.
And for even more speculation I believe he's mostly angry that his gambit didn't work. I suspect LSM wanted to sell his stock in 2021 because he knew the shareholders were coming after Like Planning, and Like Planning was probably his more reliable personal revenue stream. Also, keeping control of the creative vision for SM Entertainment has always been more important to his ego than the money.
With this board "takeover" LSM has lost his most important asset (Like Planning) and had his power as majority stakeholder completely eroded.
Anyway, that is where things stand as of February 7th, 2023. I'll probably continue to add entries as this situation evolves.
UPDATE: Head here to read Part 4: The Deal with the Devil
Today's primer is a little different. Rather than a group, I wanted to gather all my thoughts, currently spread across several twitter threads, on the SM Entertainment Stock Drama into a single post.
Especially since we have no idea when twitter will die or just, you know, decide to stop threading things or something.
Why should you care about the SM Entertainment Stock Drama?
Well, much like every other company (Twitter being a great example), product direction starts with the vision of the leadership. For years and years, that has been Lee Soo Man, henceforth known as LSM. While he hasn't been the CEO, he has been the largest shareholder (aka stock owner) and has also had the biggest hand in the company's creative direction due to his ownership of their production company Like Planning.
In the last two years, however, his power and influence has been eroded bit by bit, until we find ourselves viewing the situation that unfolded today, where it was announced he is suing his own company.
Now, you should also be asking "why do you care so much Caro? And how can we trust your analysis?"
The first answer is easy: I'm a giant fucking nerd for this shit.
The second answer is less so. While I don't work in finance or law, and very specifically do not work in Korea or am familiar with Korean laws, I do work in Marketing and have spent the majority of my career in corporate spaces. I study the way people make decisions and the way people/media talk about decisions as a part of what I do for a living.
My philosophy about CEOs, especially those like LSM who are known as giants in their field, is "they will go where their ego leads." We're seeing this with the recent Twitter acquisition and, importantly, we're also seeing this play a large role in the SM Stock Drama.
This primer will be both a collection of facts and some of my own personal speculation. I will do my best to call out when I am being speculative, though feel free to ask me questions in the comments.
Part 1: LSM wants to sell his stock. Or doesn't!
Okay, so this drama starts all the way back in the summer of 2021. In june of 2021, LSM announce that he would be selling his stake in SM Entertainment.
This was huge news, for several reasons. First and most obviously, LSM is a legend. And not always for positive reasons (tax evasion anyone?). However, there's no doubt that his leadership helped make SM Entertainment what it is today -- the second largest entertainment company after Hybe. (We will come back to this.)
Second, this would cause a massive shift in the power balance at SM Entertainment. While LSM resigned from the board of directors and CEO in 2010, he still held largest share of the company, at 18.7%. This was leaps and bounds higher than the next largest shareholder, at just ~4.5%. The majority of SM Ent's shareholders owned 1% or less of SM stock.
At nearly 19%, this meant that LSM had a huge amount of sway over the direction of the company, regardless of whether or not he was the CEO. As a rule, a company's board of directors, including the C-suite (CEO, CFO, anything with "chief" in the title), are elected by the shareholders with votes being proportional to the number of shares one owns. Not every company is set up exactly this way, but it's common.
And, speculatively, it probably has a lot to do with why one of the current co-CEOs is LSM's nephew.
Back to facts. In August of 2021, it was reported that three entertainment companies were in the running to purchase LSM's shares. The first was a dark horse candidate: CJ Entertainment. You probably haven't heard of them, however they are one of the largest movie and production companies in Korea and you may have heard of their vice chair - Miky Lee. CJ Entertainment also earned some global fame as the production company behind a little oscar-winning film called "Parasite".
The second company in the running you definitely have heard of: Hybe. According to reports, Hybe's offer was serious and larger than the other contenders, but was rejected by LSM. (Speculatively, he would never let the company beating him at his own game basically acquire the company he built. Ego!)
The third company will be a key player in this story: Kakao Entertainment. According to the same Soompi article (and please note, most of these kpop sites are rehashing articles written by Korean business journals), they offered to purchase his stocks for approximately $2.2 billion dollars, however this deal never came to pass.
In fact, Lee Soo Man never sold his stocks at all.
In October of 2021, SM Entertainment shut down rumors that CJ Entertainment was finalizing a deal. And then on March 11, 2022, Kakao Entertainment stated they were not purchasing LSM's stock.
All this hullabaloo begged the question: If LSM had no intention of accepting serious offers, why go through this exercise?
I believe it has everything to do with this second part of the story.
Part 2: Align Partners versus Like Planning. Fight!
To set the scene. Heading into 2022, everyone believed LSM was going to sell his stock and essentially retire. So when Kakao broke the news they were not purchasing his stock, it was surprising. However, 20 days later, an even bigger shockwave rippled through SM Entertainment.
On March 31st at a general shareholder meeting, a coalition of minority shareholders (i.e., those with smaller stakes in the company than LSM), appointed a third-party auditor to review SM Entertainment's financial activities.
This charge was led by our story's main antagonist, Align Partners.
Align Partners, a multi-industry investment firm, has recently been described as an "American-style shareholder activist firm". What does that mean? Well, given a lot of what I've been reading has been translated by kpop-first reporting or by me using the infallible Google Translate, my best guess is they mean an aggressive, profit-first, venture capital-esque investment firm. (Note: Align Partners is not a VC, however many of their statements read like they could come from a VC.)
The auditor was charged with thoroughly investigating SM Entertainment's finances, especially with respect to how LSM himself has been paid. Align Partners (AP) alleged that prior auditors had all had close ties to SM Entertainment, making their reports ambiguous. They also claimed that the over-payment of LSM had damaged the company's market value, and therefore, made less profit for the shareholders.
These claims were particularly shocking because SM Entertainment had just reported record revenues from 2021. However, the operating income (i.e. profit) had been negative in 2020, and generally all over the map prior, lending them more weight.
But what does this have with LSM? How is he being over paid when stocks are all worth the same?
Enter Like Planning.
Like Planning (LP) is a privately-held production company that had an exclusive contract to produce all creative content for SM Entertainment. This included music, video, web content, etc. And privately-held meant it was under the opaque control of its owner, not required to share any financial documents or details of how its owner -- namely one Lee Soo Man -- was paid.
So to recap, heading into 2022, LSM not only owned the largest share of SM Entertainment stock, but was also the owner of the only production company SM was allowed to use. This means LSM was getting paid out twice on the same work. Once by SM Ent paying Like Planning and once on any stock dividends.
I want to be clear on one point: It is unlikely any of this is illegal. There were contracts, there were lawyers, I'm sure everything was gone over with a fine-toothed comb. However, it does push the bounds of business ethics as the man with the largest controlling interest (and who was, until 2010, the CEO) is absolutely able to steer the direction of who is given these exclusive contracts. And, reductively, he awarded one to himself.
It's important to point out that the famous "SM sound" is a direct product of Like Planning. LSM's creative vision was channeled through that company, and again, had a huge influence on not just SM Ent, but the Korean entertainment scene as a whole.
In August of 2022, this came to a head, with Align Partners pointing out the clear conflict of interest between LSM owning both the majority share and LP. They insisted the board of directors move on resolving this conflict of interest and terminate the contract with LP.
They stated:
"SM paid 11.4 billion won, equivalent to 30% of its operating profit, as a commission to Like Planning in the first half of this year, and did not mention the contract issue with Like Planning."
30%! of operating profit! Going directly back to Lee Soo Man's private production company!
The profit section is key here. While there isn't much talking about the contract structure with LP, paying a commission on operating profit means that LP is getting paid almost like a shareholder itself. Speculatively, I suspect that LP was also be being paid for services rendered (the production aspect), which would be considered an operating expense, making this commission a cherry on top. Again, likely nothing illegal, this is pretty common in entertainment, the issue is the conflict of interest.
Is Like Planning being paid a fair market rate when considering experience and results? Has SM Entertainment lowered the value to stakeholders by not shopping around for other cheaper or more cutting edge production companies?
This wasn't the first time LP had come under fire, either. In 2019, the (then) second-largest shareholder, KB Asset Management made a similar claim that SM's contract with LP was diluting value and that the two companies should merge.
AP gave the board of directors until September 15, 2022 to come up with a "reasonable and specific" plan to resolve this contract issue or else they would take legal actions to protect their rights as shareholders.
And on September 15th, the board of directors caved, announcing they would review what it would take to terminate the contract with Like Planning. Then, a month later, they confirmed that the contract would end on December 31, 2022 -- a year earlier than originally specified.
We leave 2022 on the perfect definition of compromise. LSM is still the majority shareholder but he'll no longer be getting double paid, because Align Partners got the contract canceled. Everyone's grouchy, but progress is being made.
So how do we get from here to Lee Soo Man suing his own company?
Part 3: A new era at SM Entertainment. Betrayal!
Turns out Align Partners wasn't done.
On January 15th, it was announced that following a recommendation from AP, SM Entertainment would increase their board of directors from four seats to seven, with the three new seats being assigned to people/entities who were specifically non-employees of the company.
This move was touted as being part of a larger move to improve diversity on the SM Entertainment board and to provide greater transparency into the dealings with their subsidiaries and other companies. Once again, AP alleged that the current board had recklessly spent profits, approving investments into other entirely unrelated and unprofitable businesses such as wineries.
Two guesses as to who was being tapped as one of the outsiders, and the first one doesn't count.
This move garnered the attention of the broader Korean business world, however, and not necessarily in a positive light. In one Naver article, this headlined (translated by google) as a "shareholder rebellion". Now, Naver doesn't particularly have any loyalty to LSM himself, nor does the business world at large. However, if AP was successful in replacing the board of directors -- which they appeared to have a large coalition backing them -- it could have ramifications for other Korean companies.
If you're a fan of any Kdramas, you've probably heard of the term "chaebol". Historically, it has been common for large corporations to be held in the hands of a single family for generations. Corporations, i.e. businesses that sell stock and are publicly-owned, are supposed to be beholden to the shareholders that "own" the company. In practice, however, these chaebol-style businesses have more often served to enrich a single family. (This is obviously not unique to Korea, it's just a little more overt.)
By staging this "American-style" shareholder rebellion, Align Partners is setting the stage for other investment firms to successfully take on the "established" and entrenched ownership.
This January 15th announcement was swiftly followed by another on the 23rd, which is where this story starts to get even spicier. The current board of directors accepted the proposal to increase the number of board members, and formed a committee to make recommendations on who those three members would be. One third of this committee is current co-CEO Lee Sung Soo (aka Chris Lee)... Lee Soo Man's nephew.
Not only that, but they announced that they would be spending 20% or more of operating profits on shareholder dividends or to buy back stock over the next three years, and that they would be revealing plans to restructure the entire company.
Align Partner's rebellion was a success.
On February 3rd, the co-CEOs, Lee Sung Soo and Tak Young Joon, announced the restructuring of the company in a 21-minute video on YouTube. In short, SM 3.0 will look similar to JYP's "division" strategy, with five separate production divisions which should both increase artist output and provide better and clearer creative direction and management.
Personally, I think this is a good move for the company, though it's going to be a feat of change management to pull it off, and I don't have high hopes for any company's ability to do that.
By capitulating to Align Partners' proposals and by putting together this clear strategic plan for how to proceed without Like Planning at the creative helm, Lee Sung Soo and Tak Young Joon probably saved their jobs.
Then, on February 7th, it was announced that the board had issued new shares and sold them to Kakao Entertainment (remember them?), giving them a 9.05% stake in the company and making them the new second-largest shareholders.
Anonymous employee feedback on the new direction has been largely positive. With one notable exception: long-time SM artist Kim Min Jong expressed his frustration that Lee Soo Man, who had steered the company up until now and was still the majority shareholder, had been completely cut out of the process.
And of course, he wasn't the only one upset by LSM's lack of involvement.
Hours after the Kakao announcement, in a statement from his legal representatives, Lee Soo Man announced his intention to sue the board for "illegal business practices".
The important quote is this:
"On January 20 of this year, SM Entertainment’s co-CEOs Lee Sung Soo and Tak Young Joon agreed to Align Partners’ proposal without consulting Lee Soo Man, the largest shareholder in the company. This action thus further increased the tension and management disputes between the company and the largest shareholder, Lee Soo Man.
It is clearly a violation of commercial law and the articles associated with the law for SM Entertainment’s board of directors, which is led by the co-CEOs, to issue new shares and convertible bonds to third parties at a time when there is such a dispute within the company."
Now, that is all the facts I have. So it's speculation time. Once again, I am not an expert or anything like it in Korean law. However, I would highly doubt this is a "clear violation" of commercial law. This statement reads like LSM - who is no longer a decision-making entity outside of voting for who belongs on the board, which happens in March - is simply angry he's been effectively pushed out of the company he built.
And for even more speculation I believe he's mostly angry that his gambit didn't work. I suspect LSM wanted to sell his stock in 2021 because he knew the shareholders were coming after Like Planning, and Like Planning was probably his more reliable personal revenue stream. Also, keeping control of the creative vision for SM Entertainment has always been more important to his ego than the money.
With this board "takeover" LSM has lost his most important asset (Like Planning) and had his power as majority stakeholder completely eroded.
Anyway, that is where things stand as of February 7th, 2023. I'll probably continue to add entries as this situation evolves.
UPDATE: Head here to read Part 4: The Deal with the Devil
no subject
Date: 2023-02-09 05:12 pm (UTC)I haven't been talking much about this in public because all my conversations happen in DMs, but it's been so, so insane. I've been just watching the whole thing unravel with popcorn, because corporate drama is always the best drama. (The SENDING SIGNED PICTURES TO SHAREHOLDERS? WHAT?)
I really am not pleased with HB getting involved. Since they have gone public they have just been indiscriminately buying up or merging with everything they can, and mostly not with any sense or reason.