Napster jumps on possible sale

The gain was just under 14 percent for the day. That sounds like a lot, but with the stock closing at a little over four bucks a share, it's still pretty nickel and dime stuff. That may explain why Cannacord Adams is suggesting that Napster investors use the rally as a chance to get out while the getting is... well, not good, but at least better. (The L.A.-based company's 52-week high is $5.10.) Here's how the investment dealer put it: "The rising competitive heat, a slow start to the company's ad-supported, free-music initiative, and the lack of a clear path to profitability all lead us to the conclusion that Napster needs a partner."

But who? Inc., News Corp., RealNetworks Inc. and even Viacom Inc. are mentioned as contenders, though there's no word on whether anyone is really interested. Sale price being bandied about today ranges from $3 to $7 a share - $5 seems more like it. For all the money that Napster has lost, keep in mind that it has a subscription base, deals with the four major music labels and name recognition (though that probably dates back to its illegal file-sharing days).

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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