According to the Financial Supervisory Service's electronic disclosure system, Cube posted an operating loss of 5.7 Billion KRW (approximately $5 million USD) in 2016. This is a stark loss compared to the previous year as according to etoday, Cube posted an operating profit of 710 Million KRW (approximately $616,000) in 2015.
Cube Entertainment's sales declined by 13.1% in 2016 to 19.4 Billion KRW (approximately $16.83 Million) compared to the previous period in 2015. B2ST, who recently left Cube and will be promoting as Highlight under their own agency, accounted for 45% of Cube's total sales. Not only that but Cube also saw the departure of all the 4minute members except for HyunA due to contract expirations.
A rep from Cube stated, "Our sales decreased with our label artists' contracts coming to an end. We also suffered losses due to an expansion of our management portfolio and an increase in expenditures."
Earnings from Cube's affiliates such as Cube Japan and Starline Entertainment have also deteriorated. The THAAD missile issue and the strain on China-Korea relations impacting the stock prices of Korean companies have not helped matters as well. An insider in the financial sector stated, "China is continuously increasing its retaliation about the THAAD issue. As big companies such as SM and YG are also struggling, it's quite possible that Cube will not be able to recover."
Back in September of 2016, Cube had a stock price of 5,090 KRW ($4.42) per share. The stock has since dropped more than 63% and as of March 3, it traded at 1,880 KRW ($1.63) per share. Cube enjoyed a market cap of 135 Billion KRW (approximately $117 Million) during its 52-week high but it has now dropped to 49.96 Billion KRW (approximately $43.3 Million). At one point in 2015, Cube had a market cap rivaling that of JYP but JYP now enjoys a market cap that is more than 3 times larger than Cube.
It's a bit crazy to think that just a few years ago, people thought Cube would be joining the ranks of the "Big 3." It reminds me a bit of the American semiconductor company AMD. You see a meteoric rise and AMD is able to go toe-to-toe with giant Intel but then Bulldozer happened and AMD was in financial ruin. However, with a new management team, they refocused and are much the better for it. With the Zen architecture, they now have the potential to shake things up in the industry again. Cube is hoping that Hyunseung and the new B2ST trio can help turn things around for the company but there are some difficulties there. They still have one of the top K-pop artists in HyunA and there is still some hope for BTOB, Pentagon, and CLC to make a name for themselves.
Do you think Cube can turn things around?