Kuke Sued for $1.8M After $50M IPO

Oh, the sweet symphony of legal battles! It seems that the indie classical music label, Naxos, has found itself in a rather sticky situation with Kuke, a streaming service from the bustling streets of Beijing. This sounds like the beginning of a dramatic opera where instead of arias, we have accusations! Naxos is waving a hefty claim of over $1.8 million in unpaid invoices since, oh, about late 2021. They’ve decided that the US District Court for the Middle District of Tennessee is the perfect stage for this unfolding drama. Can someone get the popcorn?

The lawsuit paints a picture of Kuke as a once-timely player in the game of licensing payments, until suddenly they turned into that friend who borrows a book and never returns it—starting in December 2021, Kuke seemingly stopped making any payments, leaving Naxos desperately sending invoices as if they were love letters, only to be met with deafening silence.

Now, let’s talk about Kuke’s recent tango with the New York Stock Exchange. They celebrated raising a cool $50 million with their IPO in January 2021, only to watch their stock price drop faster than a rogue baton thrown by a disgruntled conductor. They crept back above the $1-per-share mark, but just like an overenthusiastic crescendo, the stock price has slipped below again. It’s as if Kuke is performing a game of musical chairs, and let me tell you, the music has stopped.

As if this weren’t enough to send an army of financial analysts into a tailspin, the legal complaint also reveals that Kuke happily acknowledged its breach of contract in May 2023. “Oops,” they say, and proposed a repayment plan that would let them dodge the bullets of arrears by paying only $200,000 a month. But instead, they played a tune of $50,000 payments and then—crickets. Where’s the commitment, Kuke?

In a plot twist worthy of a Shakespearean play, Naxos found itself in a position to demand compliance, insisting Kuke not only pay up but also pull down any music that wasn’t theirs. But as a gesture of goodwill—because nothing says “I trust you” like a good ol’ compromise—Naxos graciously allowed Kuke to still stream their own labels. Talk about keeping a side-eye on your “friends.”

Despite the melodrama, Kuke attempted to soothe the situation with a proposed payment of just $30,000. Let’s admit it; it’s like bringing a bouquet of wilted daisies after forgetting a significant anniversary. Naxos, perhaps with a dramatic flourish, declared this offer “totally unacceptable” and took a stand. They were either going to find a resolution, or it would be curtains for Kuke’s use of their delectable library of music.

As of September 1, Kuke found itself staring down a staggering $1.855 million bill. Naxos now stands before the court, demanding full payment, along with interest, which in the world of music contracts, feels eerily like asking for a second encore after a lackluster performance.

While they continue this gusty back-and-forth duel, Kuke seems to have plans bigger than a simple repayment, announcing their intent to acquire stakes in two companies within the Naxos Musical Group. Talk about dual citizenship in the world of classical music and business financing. It remains to be seen whether this acquisition will materialize amidst the ongoing legal symphony, but if there’s one thing we know for sure, the drama is far from over.