South Korea’s largest K-pop agency Hybe lost over $423 million in market capitalization on Friday after young group NewJeans announced it was terminating its contract with Hybe sublabel ADOR.

The announcement, which followed a months-long management dispute between ADOR and Hybe, sent the company’s shares tumbling as much as 6.97% on Friday.

The five-member girl group, formed in 2022, announced in a press conference late Thursday that it was leaving the agency, claiming ADOR had breached its contract with the band.

“Staying here would be a waste of time and would only bring mental pain,” said group member Hanni.

“We have nothing to gain professionally from staying here, so the five of us see no reason to stay with ADOR,” said a translation from South Korean media outlet Yonhap.

Two weeks ago, NewJeans sent a legal notice to Hybe with a list of demands, including the reinstatement of former ADOR CEO Min Hee-jin; otherwise, the group members threatened to terminate their contracts.

South Korean media outlet JoongAng Ilbo had also reported that the list of demands included “editing” an internal Hybe report that said to “get rid of NewJeans and start over.”

Hanni also said that there was “mistreatment not only towards us but also towards our employees, countless hindrances and contradictions, deliberate miscommunication and manipulation in several areas”. She didn’t elaborate further.

Hanni reportedly testified before the South Korean parliament in October and claimed she was harassed at work at the label.

“This is not the type of work ethic we respect or want to be a part of, and continuing to work for a company that has no intention of protecting NewJeans would only harm us,” she said at the press conference.

In April, Hybe accused then-ADOR CEO Min Hee-jin of trying to make the sublabel independent.

Min had denied the allegations and denounced Hybe, saying they had copied NewJeans’ concept to use in another girl band under another Hybe subsidiary.

Min stepped down as ADOR CEO in August but remained a director of the company before also stepping down from that position on November 20.

The group has become one of K-pop’s most popular faces upon their debut in 2022, winning numerous awards at South Korean awards shows. In 2024, NewJeans had also won the Group of the Year Award at Billboard’s Women in Music ceremony.

According to Billboard’s citation, the group scored entries on 10 Billboard charts, including the Billboard Hot 100, Billboard 200 and Billboard Global 200.

Hybe’s net profit plunged nearly 99% year-on-year in the third quarter of 2024. According to analysts, sales fell due to the limited number of artists and activities during the 2024 Olympics, while profitability was also hit by higher costs due to the launch of KATSEYE, a localized group in the US

Hybe shares have lost 15.72% so far this year, reflecting a general downward trend in the industry, with all of the “big four” K-pop agencies seeing share prices decline.