This is a really interesting piece in The Economist that underscores investor confidence and stock mania:
A MID-SIZED sized Korean semiconductor firm named DI makes products with distinctly un-sexy names like “Monitoring Burn-in Tester” and “Wafer Test Board”. It has lost money in each of the past four quarters. And there have been no changes to its fundamentals that might explain why its share price should shoot up from 2,000 to 5,700 won (from $1.80 to $5.12) in the space of just three weeks—including another 15% gain today.
But DI’s chairman and main shareholder, Park Won-ho is no ordinary mortal. He is the father of Park Jae-sang, better known as PSY (as in “psycho”). “Gangnam Style”, if you haven’t heard, is now number one in Britain’s pop charts and number two in America. Local retail investors—referred with the derogatory gaemi-deul (“ants”) by professionals—are piling into DI shares because of it.
Quite how they expect the horse-dancing YouTube phenomenon of 2012 to help DI sell more of its Wafer Test Boards is a mystery. But convoluted investor logic is of course not a new thing. DI is merely the latest example of Korea’s “theme stock”—the local equivalent of the 17th-century Dutch tulip, Pets.com and the like going into 1999, or the Chinese walnut.
According to a blog post published on the Harvard Business Review by Dae Ryun Chang, Professor of Marketing at Yonsei University, one primary factor that has contributed to “Gangnam Style”s international success is the song’s intentional lack of a copyright. This allows people to easily adopt, re-stylize and then spread the song. Brian Gozun, Dean of the Ramon V. del Rosario College of Business at De La Salle University, writes that the absence of a copyright and the use of crowd-sourcing are just some of the more innovative ways that Psy has marketed his song.
Dan Freeman, Marketing professor at the University of Delaware, remarks that Psy’s achievement is an anomaly which counters the typical trend of successful international artists, because foreign music poses a difficult challenge due to language issues, making it unlikely for a song to catch on “when you don’t even understand the words”. Freeman asserts that Psy owes his success in the United States to YouTube, because of YouTube’s effectiveness in reaching a broad market.
David Bell, marketing professor at the Wharton School of the University of Pennsylvania, suggests that “Gangnam Style” lacks a certain aggressive attitude that many find offensive in the rap genre, and “Gangnam Style” is like a classic rap video from a few years ago with girls and cars—”not as offensive and in your face, but with a humorous edge”. Bell argues that it is Psy’s accessible image, not his message, that has made the song so popular.
As per The Economist piece, this entry would be incomplete without the video: