Top K-pop stocks fall after reports that Hybe may sell $50 million stake in SM Entertainment

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Shares of two of South Korea's largest K-pop companies fell on Tuesday after industry giant Hybe is said to be pushing for a $50 million sale of its stake in SM Entertainment. Kospi-listed Hybe's stock slid as much as 2.4%, while SM Entertainment — which is listed on the Kosdaq —saw its shares plunge as much as 5.74%. South Korean media outlet Chosun Ilbo reported that Hybe — the agency that manages K-pop sensation BTS — intends to make the transaction a block deal of 750,000 shares. The news outlet also said the sale was because Hybe decided its stake "was a minority stake that had no influence on SM's management rights, it would be better to sell it in large quantities and realize profits." According to the Chosun Ilbo, the shares will be sold at a 4% to 5.5% discount to SM's last closing price of 95,800 South Korean won. That puts the sale price per share at between 91,968 to 90,531 won. This means the total transaction value would come up to about 68 billion won, or about $50 million. Before the transaction, Hybe held a 12.45% stake in SM. CNBC reached out to SM Entertainment for comment, but did not immediately receive a reply.