Game publisher Com2uS buys $47 mn worth of SM Entertainment shares

South Korean mobile and online game developer and publisher Com2uS Corp. acquired a whopping 67 billion won ($47 million) worth of SM Entertainment Co. shares last month. 

The word on the street is that the mid-sized game publisher bought SM Entertainment shares every single trading day from Oct. 12 til now, acquiring more than 4% of the total shares. 

The founder and chief producer of the K-pop label, Lee Soo-man is the largest shareholder with an 18.5% stake, while the National Pension Service and KB Asset Management hold 7.8% and 5.1% stakes, respectively. 

SM Entertainment shares have been rising since last month, jumping 16% from 61,000 won a share on Oct. 12 to 71,100 won on Monday. 

The company executed an early termination of its contract with Like Production, a boutique firm wholly owned by Lee on Oct. 14. It was originally scheduled to end at year’s end. 

Those familiar with the development explained the string of share acquisitions allows Com2uS to support SM Entertainment’s chief producer after activist fund Align Partners asked SM to reveal board meeting minutes and data on transactions with his boutique production firm.

The next general meeting of shareholders is scheduled for March 2023. Ahead of the all-important meeting, three executives deemed to be in support of Lee Soo-man, including the company’s Co-CEO Lee Sung-su, will complete their terms. 

Having Com2uS as a significant shareholder would be beneficial to Lee. 

Others still believe that the brisk acquisition of shares signals deepening business ties between the entertainment behemoth and the game publisher. 

Com2uS has repeatedly stated the company will expand its foothold in the metaverse sector, and industry insiders view that utilizing SM Entertainment’s expansive intellectual property in the digital space can lead to a synergy effect. 

The game developer formed a consortium with its subsidiary WYSIWYG Studios Co., a visual effects (VFX) production company, to invest 23 billion won in another entertainment label, RBW Inc., to become its second-largest shareholder. 

Write to Jun-Ho Cha at chacha@hankyung.com
Jee Abbey Lee edited this article.