SM Entertainment Stock Falls Despite Legal Victory Over EXO-CBX Members

Chen, Xiumin and Baekhyun of EXO attends the 2018 KBS Song Festival at KBS New Public Hall on December 28, 2018 in Seoul, South Korea. (Photo by The Chosunilbo JNS/Imazins via Getty Images)

ImaZins via Getty Images

Despite winning a clean sweep in court, SM Entertainment’s shares slid on Wednesday, October 29, dipping from 121,100 Korean won (approximately $85.16) to 118,500 KRW ($83.32) marking a 2.15% drop on the day as investor confidence appeared fragile amid the agency’s ongoing dispute with EXO members Baekhyun, Chen and Xiumin and uncertainty around their group’s future activities.

At the start of this week, SM Entertainment announced that EXO would meet their supporters in a year-end fan meeting ahead of a long-awaited album release in 2026. The “EXO’verse” event takes place on December 13 and 14 at the Inspire Arena in Incheon, South Korea, before dropping their eighth full-length album. Notably, SM announced that only six members would participate in both, with Baekhyun, Chen, and Xiumin notably absent from the announcement.

EXO-CBX Loses Lawsuits Against SM Entertainment

A string of recent rulings went SM Entertainment’s way after more than two years of legal drama following EXO’s Chen, Baekhyun and Xiumin (who also perform as a splinter trio known as EXO-CBX) attempt to terminate their SM contracts in a joint lawsuit against the company over transparency of earnings, allegations of unfair contracts and unfulfilled requests for accounting data. INB100, the agency representing the trio for their solo careers, also claimed violations in their agreements with SM over music distribution and royalty fees.

As reported by The Chosun Daily, the Seoul Eastern District Court dismissed EXO-CBX’s claims, with both the High Court and the Supreme Court upholding the dismissal on appeal and re-appeal. Government agencies in the Ministry of Culture, Sports and Tourism as well as the Korea Fair Trade Commission reviewing the matter also reached the same conclusion finding no breach of contract and ultimately did not uphold the CBX side’s claims of an “unfair contract” or “unfair support” tied to the distribution fees with Kakao Entertainment (the current majority stakeholder in SM Entertainment).

Previously, EXO-CBX’s side requested all settlement data related to EXO’s 13 years of activity from SM in the Seoul courts. However, the court only ordered data submissions from after the star’s new contract agreements. Measures to inspect and copy accounting books were deemed “speculative.”

CBX’s Agency: Still Pushing for Full-Group EXO Activities

Following the court decision, INB100 issued a statement on October 29, stating that the trio remains intent on participating in EXO’s full-group activities and has been working toward an agreement with SM Entertainment.

The statement includes an alleged timeline of talks and a pledge to “finalize the terms for full-group activities as soon as possible.” INB100 also said the members “cleared their December schedules in hopes of participating in full-group activities” and conveyed they were prepared to accept the conditions proposed by SM to enable a year-end comeback.

Read the complete statement below (with translations provided via Soompi):

We sincerely apologize for the confusion and concern caused by the delay in announcing our position on whether CBX will participate in EXO’s full-group activities.

INB100 and our artists Chen, Baekhyun, and Xiumin (hereinafter “CBX”) promised fans that, as members of EXO, they would take part in full-group activities, and we have been making every possible effort to honor that promise.

Accordingly, we would like to share what has taken place so far.

1. July 9, 2025 — First confirmation of intent to reach an agreement with SM Entertainment (hereinafter “SM”)
We met directly with SM to confirm the direction of, and commitment to, an agreement for EXO’s full-group activities.

2. September 10, 2025 — Mutual exchange of concrete terms
Both sides exchanged specific terms and entered a substantive negotiation phase.

3. Full acceptance of SM’s demands — After the second mediation date (October 2), in order to enable a year-end full-group EXO comeback, CBX clearly conveyed their willingness to accept all conditions presented by SM.

4. Schedule adjustments prioritizing EXO activities —To facilitate full-group activities, all individual schedules in December were cleared, and we awaited SM’s final reply through our legal representatives.

While we were making the above efforts for EXO’s full-group activities, we came across notices regarding an EXO fan meeting and a studio album announcement that exclude CBX.

We apologize for the delayed response as we sought to ascertain SM’s intentions regarding the progress of the agreement in this unexpected situation.

The CBX members have cherished above all the sincerity of the fans who have been with them for so long, and because they earnestly hoped for EXO’s full-group activities, they chose the path of reaching an agreement.

Accordingly, we plan to finalize the terms for full-group activities as soon as possible.

We are grateful to the fans who always trust and wait for us, and we will do our utmost to deliver good results. We ask for your continued expectations and support.

SM Responds: Legal Resolution ≠ Instant Trust

SM Entertainment’s own response pushed back on INB100’s framing and emphasized that legal resolution and group activity are separate matters.

In its statement, SM said it “had already won all of our legal disputes and the only request we made of the trio was that they pay the 10% of their revenue from individual activities that was stipulated in our existing agreement from June 18, 2023. However, at present, this has not yet been fulfilled.”

The company added that “the multiple unreasonable lawsuits have not only significantly destroyed trust between our two sides, but have also caused great harm to the group EXO and wounded both the fans and the members,” arguing that restoring trust should precede participation in group work.

You can read SM’s latest statement in full below (with translations provided via Soompi):

We would like to address the statement made by Byun Baekhyun, Kim Jongdae [Chen], and Kim Min Seok [Xiumin] (hereafter referred to as the trio)’s side.

We clearly stated to the trio in the past that reaching an agreement to end our legal dispute and [EXO’s] group activities were two separate matters.

First, regarding the conclusion of our legal dispute, we had already won all of our legal disputes [with the trio], and the only request we made of the trio was that they pay the 10 percent of their revenue from individual activities that was stipulated in our existing agreement from June 18, 2023. However, at present, this has not yet been fulfilled.

Additionally, regarding the issue of participation in group activities, the multiple unreasonable lawsuits have not only significantly destroyed trust between our two sides, but have also caused great harm to the group EXO and wounded both the fans and the members. Therefore, it was only natural that the trio should first fulfill the terms of the existing agreement and demonstrate a sincere effort to restore trust.

However, contrary to the trio’s claim that they had clearly conveyed their willingness to reach an agreement and accept all conditions proposed by us after the second mediation date on October 2, they first filed an appeal on the 16th. We cannot help but express deep regret at the trio’s statement from today, which distorts the truth regarding these kinds of circumstances.

We will do our utmost to fully support EXO’s activities, which will begin in December.

Thank you.

What’s Next for SM: EXO Comeback Amid Packed November & December

As previously mentioned, SM has announced EXO will hold a December fan meeting and intends to release a full-length album in early 2026. However, the company said only six members — Suho, Chanyeol, D.O., Kai, Sehun, and Lay — will participate in those activities.

On October 30, INB100 responded to SM, sharing that EXO-CBX “remains committed to paying 10% of their revenue to SM Entertainment,” but added that “all negotiations have been based on the premise of full-group EXO activities. CBX made clear their intent to perform the existing agreement, were communicating directly with the members, and have been striving to be together as part of the group.”

INB100 ended saying, “CBX will faithfully carry out the existing agreement and will do their utmost to rebuild trust with the members and to reach an amicable agreement with SM.”

While there may still be several high-stakes negotiations over the coming weeks, SM Entertainment still has a packed schedule for many of its other artists before the year’s end. The label’s calendar includes an album from TVXQ! member U-KNOW on November 5, a mini album from NCT DREAM on November 16, as well as previously announced releases from artists like Red Velvet, NCT 127, WayV, RIIZE, TVXQ!’s Max Changmin, Super Junior’s Kyuhyun, Girls’ Generation’s Taeyeon, SHINee’s Minho, NCT’s Jungwoo and more.

Investor Takeaway: Legal Clarity, Relational Uncertainty

The market’s reaction on October 29 suggests investors rewarded legal clarity but remain wary of the relational and operational risks that follow high-profile artist disputes.

Winning in court removes a layer of legal ambiguity, but it doesn’t instantly repair frayed ties between a label and three of the most visible artists associated with one of its flagship acts. For SM Entertainment, successful EXO activities would be a strong catalyst to kick off the company’s 2026 — but if discord lingers, that will inevitably leak into fan sentiment, where momentum for the December fan event and next year’s album could be muted, with that risk looking to be what moved the stock on Wednesday.

At press time, SM Entertainment’s stock is up almost 70% for the year.