Scenario C. (This is background information. See below for the specific questions)

On October 15, 2020, Big Hit Entertainment, the label management company behind the hugely popular K-pop band BTS, went public on the Korea Stock Exchange. Underwritten by JP Morgan and two South Korean investment banks, Big Hit issued about one fifth of its shares to the public and the offer was the largest IPO in South Korea in three years. It was more than 1000 times oversubscribed by institutional investors, and more than 600 times by retail investors.

The IPO price was set at (a USD equivalent price of) $118. On the first day of trading, the shares opened at $236 before eventually settling at $225. The financial media observed this event with fascination, offering commentaries such as The management company behind the popular South Korean boy band BTS has scored a huge hit on the countrys stock market after its shares doubled on their first day of trading. (theguardian.com)

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(5 marks) Refer to Scenario C above. The press often rates the success of an IPO by its first-day share price return. From the perspective of the pre-IPO owners (including the companys founder Bang Si-hyuk and the band members), is a large first-day return an indication of success or a cause of concern? In your own words, provide ONE reason for why the market price for Big Hit Entertainment jumped on the first day from the IPO offer price.