Analysis of Market Efficiency Hypothesis and Information Transfer Effect on Entertainer News of Domestic Entertainment Companies through Case Studies

The purpose of this study is to investigate how the private actions of major celebrities belonging to domestic entertainment companies affect the company's stock price. The four major entertainment companies listed in Korea are SM, JYP, YG, and HYBE, and they have achieved great growth in the stock market due to their great popularity on the international stage. However, the stock price of entertainment carries a risk that is very sensitive to the private actions of the entertainers belonging to it. In this study, a case study was conducted to investigate how the actions of entertainers belonging to major entertainment companies listed on the domestic stock market affect the stock price of the company. The results of the study show that major events of a celebrity not only have an immediate impact on the stock price of the company, but also have a partial impact on the industry. These results are consistent with the efficient market hypothesis, and at the same time, it can be seen that the transfer effect within the industry is also partially exhibited. This study is meaningful in that it shows that the risks posed by the private actions of the affiliated entertainers must be accurately reflected in evaluating the stock prices of domestic entertainment companies.