'Parasite' producer Barunson Entertainment & Arts faces delisting amid years of losses

The cast of "Parasite," produced by Barunson Entertainment & Arts, attends the Academy Awards ceremony in 2020. [Screen capture from social media]

The New York Times once called "Parasite" the best film of the 21st century.

Now the company that made it is fighting to stay listed. Barunson Entertainment & Arts, once one of South Korea's most celebrated film producers, has been placed on the Korea Exchange's watchlist for falling below the minimum market capitalization threshold. If its market cap remains below 20 billion won ($14.9 million) for 21 consecutive trading days after the watchlist designation, the company will be delisted.

The situation has sent shockwaves through the industry, given that Barunson is the studio behind "Parasite" — a film widely recognized as one of the greatest of the century.

The company has posted operating losses for nine consecutive years, from 2017 through 2025. Last year, its consolidated sales came to about 11.6 billion won, but it recorded an operating loss of about 2.2 billion won and a net loss of about 5.2 billion won. It has not returned to profitability this year either.

The fall of a studio once regarded as a pillar of Korean cinema underscores how serious the crisis facing the country's film industry has become.

According to Korea Exchange filings, Barunson was placed on the watchlist on Aug. 6 for falling short of the market cap requirement. On Aug. 13, a second ground was added: its share price had dropped below 1,000 won, qualifying it as a penny stock. As of Friday, the share price stood at 700 won.

Since being placed on the watchlist, Barunson's market cap has shrunk from the 15 billion won range to the 13 billion won range.

A screen capture from the Barunson Entertainment & Arts website. [Screen capture from Barunson Entertainment & Arts website]

Minority shareholders are pushing back hard. As of late June, they held 68 percent of the company's total shares. They are reportedly considering legal action against management.

Minority shareholders have also taken issue with the company's price-to-book ratio of around 0.2, even as it continues to post losses. A PBR of 0.2 means the company's market cap is just 20 percent of its net book value — in other words, the shares are trading at an 80 percent discount to what shareholders would theoretically receive if the company were liquidated today.

Skepticism about the film business is also growing as moviegoer numbers decline under pressure from OTT services. A monthly OTT subscription costs roughly the same as a single movie ticket, while a trip to the movie theater — factoring in the ticket and snacks — runs an average of 30,000 won ($22) per person. Many consumers have concluded they are better off staying home and streaming Netflix.

park@heraldcorp.com