Kakao is in damage control mode, divesting its holdings in SM Entertainment as part of a broader corporate overhaul. The move comes amid a perfect storm of legal troubles, public backlash, and plummeting stock prices.
Founder Kim Beom-Su faces mounting pressure following investigations into stock manipulation. To restore investor confidence, Kakao is shedding non-core assets, including SM Entertainment, Kakao Games, and Kakao Entertainment.
The sale of SM Entertainment is particularly noteworthy given the high-profile acquisition process and subsequent controversies. The company’s involvement has added to Kakao’s legal woes and negative public perception.
As Kakao focuses on streamlining its operations and rebuilding trust, the future of SM Entertainment hangs in the balance. Industry watchers will be closely monitoring the sale process and its potential impact on the K-pop landscape.