NYSE Announces Immediate Delisting of Kuke Music American Depositary Shares
Photo Credit: Anne NygĂĄrd
The New York Stock Exchange announced the immediate delisting of Kuke Music shares after the stock experienced a dramatic decline over the past year.On Tuesday, the New York Stock Exchange (NYSE) announced the immediate delisting of the American Depositary Shares (ADSs) of Kuke Music Holding Limited (KUKE). Trading of the company’s ADSs has been suspended immediately.
The announcement comes as the stock experienced a severe 90% decline over the past year, with its market capitalization falling to $130.4 million.
NYSE regulation made the delisting decision after Kuke Music failed to maintain an average closing price of at least $1.00 over a consecutive 30 trading-day period. This is required under Section 802.01C of the NYSE’s Listed Company Manual.
Further, the exchange noted that the company had implemented a change to its American Depositary Receipts ratio, equivalent to a reverse stock split, during the prior one-year period.
The company’s financial health core is rated “Weak” according to data from InvestingPro, with a current ratio of 0.34 indicating “significant liquidity challenges.”
Kuke Music has the right to appeal this decision through a review by a committee of the NYSE Board of Directors. Should the delisting proceed, the NYSE will apply to the Securities and Exchange Commission to formally delist the company’s ADSs after all applicable procedures are completed, including a potential appeal.Kuke Music has faced numerous challenges in maintaining compliance with NYSE listing requirements. The news comes just four years after Kuke’s $50 million IPO in January 2021, but Kuke is now embroiled in significant liquidity challenges and a brutal 36% drop in revenue last year.
Meanwhile, Kuke Music has also acquired a controlling stake in Naxos Music Group, one of the largest independent classical music companies worldwide. The acquisition, valued at approximately $106.35 million, was completed through the issuance of Kuke’s Class A ordinary shares.
Kuke has also formed a strategic partnership with People’s Music Publishing House, China’s national music publishing institution. The collaboration aims to enhance global music cooperation, support young Chinese musicians, and develop a digital music ecosystem.
That partnership comes on the heels of yet another partnership for Kuke in the form of Chinese automaker Great Wall Motor (GWM). The deal revolves around integrating a customized in-car music application in GWM’s new intelligent electric vehicles.
These developments indicate Kuke’s expanding influence in both the music and automotive industries. However, the company’s recent liquidity struggles and impending NYSE delisting leave Kuke Music’s future success up in the air.
