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One of the largest K-pop agencies in South Korea faces a market value decline of $423 million over internal conflicts.

In particular, popular girl group NewJeans announced on Thursday, November 28, that they will be leaving their agency, ADOR, which is under HYBE.

According to CNBC, the 5-member group, which began in 2022, contested that the agency violated their contract. This, in turn, led to a huge distress among its members. One of the members, Hanni, maintained that staying with ADOR would only be pure mental torture and will also prevent them from developing professionally.

Impact of NewJeans' Contract Termination to HYBE

As a result, Yahoo Finance reported that HYBE shares dropped massively, plummeting by almost 7%.

However, experts believed that the agency shouldn't have been surprised after the girl group earlier submitted a list of demands, which included reinstating the former CEO of ADOR, Min Hee-jin. The group threatened to end their contract if these demands were not met. Their concerns included allegations of mistreatment and manipulation at the workplace, which they deemed harmful not only to themselves but also to their employees.

This led to formal notice from them about their intention to terminate the contract.

Now, the conflict between Hybe and ADOR has been simmering for months, per VCPost. In April, HYBE had accused Min Hee-jin of trying to separate ADOR from the group and make it an independent company, which Min said was not true, instead stating that Hybe borrowed NewJeans' idea for a new girl group.

Even after Min left her position as CEO of ADOR in August, the conflict continued to affect the group's relationship with the agency, making their decision to leave a breaking point.

NewJeans is one of the most successful groups in K-pop to date, with a massive amount of recognition through its chart-topping hits and other accolades, such as the 2024 Group of the Year Award at Billboard's Women in Music. It's no surprise that the war has dented HYBE's performance.