The matter of listing the company’s stock had plainly come up within TopEast.
“Debonair’s sales have certainly come in above expectations.”
However, Director Han of the Planning and Coordination Office, the senior working-level representative of TopEast’s management headquarters, considered a listing premature.
“We expected to be in the red through the first album, but sales have been substantial. It looks like we’ll turn a profit before the next comeback.”
The reason TopEast was so desperate to go public was a single clause in the contracts they had signed with investors they brought in long ago.
If the company failed to list by the end of this year—by December 31, 2025—it would have to pay back the investors’ shares.
In other words, if they paid back the capital raised through the previous paid-in capital increase, they would have to cover the company’s already-inflated valuation with its retained earnings.
“If we can’t list by the end of the year, and if we don’t receive an extension, we’ll have to return around nineteen billion won. Which means we’ll need to attract that much investment all over again.”
The initial investment had been around fourteen billion won, but thanks to expectations surrounding Saven, as well as Debonair—
the company’s potential valuation had risen, meaning that if they failed to secure an extension, they would have to return more than the principal to the investors.
“Our retained earnings are... insufficient. On top of that, Pastel Love is about to disband, and it’s time for the Xten members to enlist in the military...”
Debonair’s debut had come at the worst possible time, coinciding with bad news for the two groups that had previously been the company’s cash cows.
“The money Dohee and Seoyoon earned as members of Saven was certainly substantial when you look at it closely, but since it was divided among the other members and Shock Entertainment, the profits retained by the company are still poor.”
Debonair’s debut, in particular, had required a considerable investment because of the extensive promotions and double title tracks.
*The next comeback will probably have double title tracks as well...*
Representative Kim Widong let out a sigh.
“Phew... Leaving Debonair aside, what’s our projected net profit for this year?”
“Approximately eleven-point-eight billion won.”
“We can cover two-thirds of it, at least.”
Of course, if they went public, everything would be resolved without any need for concern.
But as Director Han had said, a listing was premature.
They had many singers and actors under their label, but with the absence of their two biggest cash cows, TopEast now had only a single team.
And that team was a rookie girl group, Debonair. Their financial stability would inevitably be called into question, since the company’s fortunes were being left entirely in the hands of one group.
Moreover, even the investment interest in Debonair would clearly be divided between the group and Ailee of JS, who had set first-week sales figures higher than Debonair’s, along with the reputation of JS as one of the existing Big Four entertainment companies.
That was why a listing under the current circumstances—
would result in an offering price below the company’s actual value, leaving it undervalued.
“Because of that damn Jeodol, our timing got completely screwed up.”
They would lose money whether they listed or not.
And if they chose not to list, they would still have to beg the investors for their understanding.
“It would’ve been better if Jeodol had never existed. If it hadn’t, we would’ve debuted the members ages ago.”
“At least there’s that. Thanks to Saven, Seoyoon has already become a Fendi ambassador despite being a rookie.”
Of course, as Director Lee Jeonghye of the management team had said in consolation, the fact that both Seoyoon and Dohee had been selected as luxury-brand ambassadors was a tremendous gain.
Ambassadors were not chosen based solely on popularity within Korea.
It was, fundamentally, proof that they had a considerable number of overseas fans as well.
At present, there were only five luxury-brand ambassadors from small and midsized entertainment companies rather than the Big Four, even including the two of them.
And in the high-end category, brands such as Cartier had chosen only Dohee.
But Kim Widong was convinced that even without that, Debonair could not fail no matter how hard it tried.
From the members’ composition to the concept and the songs.
The project itself was the reason they had attracted so many investors in the first place.
“But this is the problem. Once we pay back the retained earnings and this year’s net profit, we won’t have any money left to pour into Debonair.”
They had intended to pour all two hundred billion won or so into Debonair.
They could make do if they received an extension on the repayment period, but... those sly investors were watching the situation carefully and putting off any firm promise regarding an extension.
Yes, but even so, a listing was still premature.
For now, they had to find a way to obtain new activity expenses and investment funds for Debonair.
There were three methods.
Take on new debt using the company’s assets as collateral.
Find new investors and conduct a paid-in capital increase.
Or artificially inflate Debonair’s sales for a short period.
*Cash would still be best.*
Increasing Debonair’s sales.
And the way to do that was—
“Let’s start by opening fan sign events.”
Just as Moon Gyucheol, the head of Singer Division One, had argued.
They would work the members hard and pull forward album sales.
“This album’s first-week figures have already been released, so it would be better to do it with the next album, when it’ll be more useful for media play.”
The method was simple.
If they held a fan sign event, countless fans would appear, willing to purchase dozens or even hundreds of albums just to attend.
So all they had to do was hold countless fan sign events.
They could add a little trick by signing fan sign event contracts with distributors in advance.
If the distributors purchased the albums beforehand—
albums that would otherwise be purchased after the first week could be counted toward first-week sales, making their performance look better. It was a structure with no real downside.
“If things go well, they might even surpass Ailee’s first-week sales with the next album.”
But there were side effects.
* * *
Jeong Sohyeon could not understand it.
“Director. No matter how much Dohee and Seoyoon are in the group, they’re still a rookie group that just debuted. This is the time when they need to solidify their fan base and support. You know that exploiting the fans’ devotion like this is wrong. During their next activities, we should be continuing to produce content, even if it means reducing the number of fan sign schedules, shouldn’t we?”
“Of course we need to solidify their support base. Who doesn’t know that? But what are we supposed to do with the inactive period? When that time comes, we can hold fan signs. For now, we can film a ton of content in advance and release it then.”
Xten and Pastel Love had done the same thing.
“No, they need to practice now. Perfectly. We need to develop the members’ individual abilities as well. They should continue vocal and dance lessons in addition to practicing their activity songs. At the very least, they should upload covers of overseas singers one by one—”
“Director Jeong—no, Executive Jeong. Even Chiyo, who had the shortest trainee period, trained for over four years. They already did plenty of that as trainees. How much more do they need? Just look at Dohee and Seoyoon. They did fine on their own during Saven, didn’t they? Besides, the two of them already have plenty of individual schedules, so when would they—”
When Jeong Sohyeon had merely been an employee on the A&R team, no matter how good the songs she selected were—
“So they need to practice during whatever time remains after finishing their unavoidable individual schedules. I’m not satisfied with a few tens of billions in annual sales. Coral Blue and Coral Blue Rira make thirty-one billion won a year from Instagram alone. Jina makes twenty-four billion—”
“They’ve been around for years. Their senior groups paved the way for them.”
In the end, their promotional methods, viral marketing, and approach to fans had all reached their limits.
“What about NND? Did they have a senior group?”
“They’re a boy group. It’s naturally easier for female fans to get attached to them.”
“Yes. That’s why I set the group concept this way. So female fans would admire and like them as well.”
That was the reality and structure of TopEast, a small and midsized company.
“Listen, Executive Jeong. I’m the one in charge of Division One. The Singer Management Office, the Marketing Office, and the Album Business Office all belong to Division One. Girl groups built on public appeal don’t collapse as long as they have good songs. They just need to keep making good songs like they always have—”
“How long are we supposed to do that? Did Pastel Love fail to score hits? They had three hits in a row, then four. But then one wrong release makes them stumble. Again?”
But Debonair’s members were girls whom she had watched individually from their trainee days, agonizing over them more than anyone else as the head of the A&R team.
“I’m not trying to maintain the status quo. When a song does well, we need to use it as an opportunity—a foothold—to start rolling a snowball, and keep rolling it until we eventually enter the overseas market. That’s why I said I would take charge of Debonair this time and oversee everything. Every department.”
Dohee, in particular, was a born sure bet whom everyone would have trusted even without her.
It was lucky that a girl who could become not only an icon of the fourth generation, but perhaps an icon of idols themselves, had come to TopEast, a midsized agency.
“Team Leader Jeong, do I have to call you Executive Jeong now? Debonair’s members aren’t Executive Jeong’s puppets.”
“Nor are they Director Moon’s puppets—”
Bang─!
The enormous crack of something striking the table rang through the conference room.
“Haa... We’re not here to argue among ourselves.”
For a moment, there was silence, broken only by the phlegmy sound of Kim Widong clearing his throat.
“Phew... Let’s keep Debonair’s schedule as it is. Executive Jeong, do it your way. With everyone’s attention focused here, we have to follow the original plan.”
“Besides, NND also started out carrying hundreds of billions of won in debt, whereas we turn a profit every year. We make tens of billions, even hundreds of billions, in profit.”
“If a paid-in capital increase isn’t possible, I’ll sell my own shares and convert them into the company’s capital. That way, we can conduct the capital increase and make up the investment funds at the same time...”
* * *
After everyone had left, only Jeong Sohyeon and Kim Widong remained in the conference room.
─Hiss
Representative Kim sank back in his chair, lit a cigarette, and spoke to his niece, Jeong Sohyeon.
“Moon Gyucheol. That bastard is a complete moron. A total idiot.”
“Uncle. You’re turning sixty soon. Watch your language...”
“She takes after her mother, always nagging. She got all worked up because she was afraid the kids would be worked too hard.”
Seeing Jeong Sohyeon’s expression harden, Kim Widong took a long drag from his cigarette.
“Phew... Ha, that bastard has such a wide network that I can’t even fire him. And to entertain people properly, you have to be at least a division head. That’s how it is. Being good at entertaining people is almost as valuable a skill as being good at the actual work, you know.”
“...I know. I was just being rash—”
“Forget it, forget it. Later, I’ll offer him an executive position and have him buy company stock. We can conduct a paid-in capital increase, make up the investment funds, and turn him into a full-time entertainment man while we’re at it. Right?”
“...Yes.”
“Good. Go take care of your work. Today’s the kids’ last day of activities, so go buy them something delicious. Don’t deduct it from their settlement—use my corporate card.”
As Jeong Sohyeon nodded, Representative Kim Widong tapped the ash from his cigarette.
“Oh, but if you’re going to eat beef again, make sure you get sirloin, not tenderloin. Hey! Listen to the end...”