SM Entertainment shares fall despite legal victory over EXO-CBX members

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

Early this week, SM Entertainment announced that EXO would meet their supporters at an end-of-year fan meeting ahead of a highly anticipated album release in 2026. The ‘EXO’verse’ event will take place on December 13 and 14 at the Inspire Arena in Incheon, South Korea, ahead of the release of 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 series of recent rulings went SM Entertainment’s way after more than two years of legal drama after EXO’s Chen, Baekhyun, and INB100, the agency representing the trio for their solo careers, also alleged violations of their agreements with SM over music distribution and royalties.

As reported by The Chosun Newspaperthe Eastern District Court of Seoul dismissed EXO-CBX’s claims, with both the Supreme Court and the Supreme Court upholding the dismissal on appeal and re-appeal. Government agencies from the Ministry of Culture, Sports and Tourism and the Korea Fair Trade Commission that investigated the case also came to the same conclusion, finding that there was no breach of contract and ultimately did not consider the CBX party’s claims of an “unfair contract” or “unfair support” linked to the distribution fees with Kakao Entertainment (the current majority shareholder in SM Entertainment).

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

CBX agency: Still pushing for group-wide EXO activities

Following the court ruling, INB100 issued a statement on October 29, saying that the trio continues to plan to participate in EXO’s entire group activities and has been working on an agreement with SM Entertainment.

The statement includes an alleged timeline of talks and a promise to “finalize terms for group activities as soon as possible.” INB100 also said members had “cleared their calendars for December in hopes of participating in group-wide activities” and indicated they were willing to accept SM’s proposed terms to allow for a year-end comeback.

Read the full statement below (with translations via Soompi):

We sincerely apologize for the confusion and concern caused by the delay in communicating our position on whether CBX will participate in EXO’s entire group business.

INB100 and our artists Chen, Baekhyun and

That’s why we would like to share what has happened so far.

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

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

3. Full acceptance of SM’s requirements — After the second mediation date (October 2), to allow for an EXO full-group comeback at the end of the year, CBX clearly stated their willingness to accept all of SM’s terms.

4. Plan adjustments that prioritize EXO activities —To allow activities for the whole group, all individual schedules were approved in December and we waited for the final response from SM through our legal representatives.

While making the above efforts for EXO’s entire group activities, we came across notices about an EXO fan meeting and a studio album announcement that excluded CBX.

We apologize for the delayed response while trying to determine SM’s intentions regarding the progress of the agreement in this unexpected situation.

The CBX members have especially cherished the sincerity of the fans who have been with them for so long, and since they fervently hoped for EXO’s group activities, they chose the path of reaching an understanding.

Therefore, we plan to finalize the conditions for group activities as soon as possible.

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

SM replies: Legal solution ≠ Immediate trust

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

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

The company added that “the many unreasonable lawsuits have not only significantly destroyed the trust between our two parties, but also caused great damage to the EXO group and injured both fans and members,” arguing that restoring trust must precede participation in group work.

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

We would like to comment on the statement of Byun Baekhyun, Kim Jongdae [Chen]and Kim Min Seok [Xiumin] (hereinafter referred to as the trio)’s side.

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

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

Moreover, regarding the issue of participation in group activities, the many unreasonable lawsuits have not only significantly destroyed the trust between our two parties, but also caused great damage to the group EXO and injured both fans and members. Therefore, it was only natural that the trio would first fulfill the terms of the existing agreement and make a sincere effort to rebuild trust.

However, contrary to the trio’s claim that they had clearly demonstrated their willingness to reach an agreement and accept all the terms we proposed after the second mediation date on October 2, they first filed an appeal on October 16. We cannot help but express our deep regret at today’s statement by the trio, which distorts the truth about these types of circumstances.

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

Thank you.

What’s next for SM: EXO Comeback in mid-November and December

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

On October 30, INB100 responded to SM and shared that EXO-CBX “remains committed to paying 10% of their revenues to SM Entertainment,” but added that “all negotiations are based on the premise of EXO’s entire group activities. CBX made clear their intention to implement the existing agreement, communicated directly with the members and aimed to be together as part of the group.”

INB100 ended by saying: “CBX will faithfully implement the existing agreement and do their utmost to restore confidence among members and reach an amicable agreement with SM.”

While several high-stakes negotiations may still take place in the coming weeks, SM Entertainment still has a full schedule for many of its other artists before the end of the year. The label’s calendar includes an album by 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.

Takeaway for investors: legal clarity, relational uncertainty

The market’s reaction on October 29 suggests that investors have 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 doesn’t immediately mend the frayed ties between a label and three of the most visible artists associated with one of their flagship albums. For SM Entertainment, successful EXO activities would be a strong catalyst to kick off the company’s 2026 year – but if the discord continues, it will inevitably trickle down to fan sentiment, where momentum for December’s fan event and next year’s album could be dampened, with that risk appearing to be what moved the stock on Wednesday.

At the time of writing, SM Entertainment shares are up almost 70% this year.