Kakao bought SM Entertainment shares 553 times in 4 days to beat a rival bid

In February 2023, Kakao and its entertainment unit were fighting HYBE, the agency behind BTS, for control of K-pop label SM Entertainment. HYBE had made a tender offer at 120,000 won per share. Over four days, Kakao and its affiliates bought SM shares on 553 separate occasions, spending roughly 240 billion won and repeatedly bidding the price above HYBE's offer — Korea's Financial Supervisory Service later said about 110 billion won of those purchases were meant to keep the price out of HYBE's reach rather than to build a stake.

The tactic worked: HYBE withdrew its bid once SM shares traded well past its tender price, and Kakao closed the deal in March 2023 with a 39.87% stake. The FSS referred Kakao Corp, Kakao Entertainment and three executives to prosecutors that October, and Kakao's chief investment officer, Bae Jae-hyun, was arrested the same month.

Kakao founder Kim Beom-su was indicted in August 2024 on stock-manipulation charges and held in detention. In October 2025 the Seoul Southern District Court acquitted him, ruling prosecutors had not proven the share purchases amounted to manipulation rather than legitimate competitive bidding; prosecutors had sought a 15-year sentence. The case was under appeal as of early 2026.