Top K-pop stocks fall as Hybe sells $50 million stake in SM Entertainment

Shares of two of South Korea's largest K-pop companies fell on Tuesday as industry giant Hybe announced a $50 million sale of its stake in SM Entertainment.

Kospi-listed Hybe's stock slid as much as 2.4%, while SM Entertainment — which is listed on the Kosdaq —saw its shares plunge as much as 5.74%.

In a regulatory filing, Hybe — the agency that manages K-pop sensation BTS — said that about 755,000 shares were sold for 90,531 South Korean won per share in a block deal, a 5.5% discount from SM's last closing price of 95,800 won.

This means the total transaction value would come up to about 68 billion won, or about $50 million, and would reduce Hybe's stake from 12.45% to 9.37%.

South Korean media outlet Chosun Ilbo earlier reported that the sale was because Hybe decided its stake "was a minority stake that had no influence on SM's management rights, it would be better to sell it in large quantities and realize profits."

CNBC reached out to SM Entertainment for comment, but did not immediately receive a reply.

In February last year, Hybe lost a takeover bid of SM to South Korean social media giant Kakao, which currently holds about 40% of the company.

The move also comes amid a separate long-running battle between Hybe and its sublabel ADOR, which manages girl group NewJeans.

Hybe shares have plunged 13.66% since April 19, the last trading day before Hybe launched an audit into ADOR.

Hybe is expected to replace ADOR CEO Min Hee Jin in an extraordinary general meeting on May 31 after she was accused of wanting to take the sublabel independent. A Hybe statement sent to CNBC on April 25 said the company also called for Min to step down.

Min has denied those allegations and accused Hybe of copying the concept of ADOR's girl group,