The New York Stock Exchange (NYSE) has officially delisted Kuke Music Holding Ltd. (KUKE), a Beijing-headquartered classical music licensing and streaming company, after a precipitous decline in its share price. The mandatory halt to trading was announced on Tuesday, October 21, marking an abrupt end to the company’s public tenure that began in January 2021. This delisting, triggered by NYSE rules requiring a minimum $1 share price for a sustained period, shines a spotlight on the company’s severe financial challenges and a highly public corporate dispute.
Financial Turmoil and Regulatory Pressure
Kuke’s stock has been trading below the required $1 mark since late September, having plummeted a staggering 85% since the start of 2024. Financial analysts at InvestingPro rated the company’s health as “weak,” noting it is facing “significant liquidity challenges.” This instability is clearly reflected in Kuke’s 2024 results, which saw revenue drop nearly 36% year-over-year. Compounding these issues, the NYSE highlighted a regulatory red flag: Kuke had changed the ratio of its shares to American Depositary Shares (ADSs). This move suggested the company may have employed a reverse stock split to potentially mask an even larger decline in its true market valuation.
The Naxos Acquisition Controversy
Beyond the balance sheet, Kuke is tangled in a major corporate controversy involving classical music powerhouse Naxos Music Group. Kuke was initially sued last year by Naxos over $1.8 million in alleged non-payment of licensing fees. While Kuke later announced it had acquired a controlling stake in the Nashville-headquartered company, with CEO Peixian Tan calling the deal a “landmark transaction,” Naxos co-founders Klaus Heymann and Takako Nishizaki publicly disputed the claim. They asserted Kuke’s announcement did not “contain the whole truth,” prompting Naxos to stop licensing music to Kuke as of October 1, 2024.
The delisting from the NYSE serves as a powerful reminder of the deep financial instability facing Kuke, a company founded by Hu Ye in 2002. From a continuous run of negative EBITDA and significant revenue drops to the dramatic, public battle over the Naxos acquisition, Kuke faces a challenging road ahead. While trading has stopped under the ticker KUKE, the company still retains the right to appeal the delisting decision to the NYSE’s Committee of the Board of Directors
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