Top Netflix Hit ‘Squid Game’ Sparks Korean Media Stock Surge
(Bloomberg) -- The latest smash hit from the Korean entertainment world “Squid Game” is also proving popular with investors, who have been snapping up shares of at least two companies related to the thriller series.
A dramatized survival game in the vein of “Hunger Games,” the show currently tops the global rankings on Netflix Inc., and is the first Korean drama to claim the No. 1 spot in the U.S. on the service, according to data from streaming ratings firm FlixPatrol.
Bucket Studio Co., which holds a stake in the agency representing Squid Game’s lead actor Lee Jung-Jae, has surged more than 70% in the past three trading sessions. Showbox Corp. -- whose predecessor had invested in Siren Pictures, the show’s privately owned production company -- jumped more than 50% last week before slipping Monday.
Bucket Studio is only an indirect beneficiary of “Squid Game,” and Showbox’s connection is also uncertain since Siren Pictures is 100% owned by its CEO Kim Ji-Yeon, according to a note by analyst Douglas Kim on Smartkarma. Still, Korean movie and TV production stocks could outperform over the next 2-3 years on global demand for the nation’s entertainment content, he said.
Netflix on Saturday held its first-ever Global Fan Event with a sneak peek of its upcoming films and TV shows. It’s an opportunity to prove it has the content it needs to drive a surge in new users, even as the battle for viewers and their wallets escalates.
“Squid Game” depicts a group of people with huge debts taking part in a series of deadly games to win prize money. Its depiction of the battle between the haves and have-nots has also drawn comparisons with Oscar-winning black comedy “Parasite,” which helped drive gains in shares of its producer CJ ENM Co. early last year.
CJ ENM rose as much as 2% before closing flat on Monday. Studio Dragon Corp., whose “Hometown Cha-Cha-Cha” series is ranked No. 7 on Netflix worldwide, according to FlixPatrol, rallied 5.2%, its biggest daily gain in six months.
Korean companies can produce “highly popular dramas and movies that could pose a serious competitive threat to the Hollywood powerhouses,” Kim said. “‘Squid Game’ is a very good example of this,” he said
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