SM Entertainment shares soar 18 percent Friday morning following announcement

Lee Soo-man, chief producer of SM Entertainment [SM ENTERTAINMENT]

 
SM Entertainment's shares traded 18 percent higher Friday morning after the K-pop company announced on Thursday it may sever ties with a music production company 100 percent owned by Lee Soo-man.
 
SM Entertainment closed at 64,500 won on Thursday. It was trading at 76,400 won as of Friday 11 a.m.
 
Like Planning is a music production and consultation company founded and 100 percent owned by Lee. It takes around 6 percent of SM Entertainment’s revenue as the cost of Lee’s participation in SM artists’ music.
 
SM Entertainment paid Like Holdings 11.4 billion won ($8.2 million) during the first half of this year.
 
Align Partners Capital Management, which owns 1.1 percent of SM Entertainment, has been criticizing the two companies' relationship as "damaging shareholder value" and demanding the agency cut ties with Like Planning since earlier this year.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]