Blog Post

Napster’s Stock Up on Loudeye Sale; Is It Logical?

Now that Loudeye is sold, Napster’s stock is up (about 7 percent today), on the hope that it will finally get sold. The sale rumors for Napster have been around for some time, and some companies have even looked at it, as we reported before.
In June, Napster inked a deal to combine its catalog and brand with Ericsson to deliver mobile music, and is about to rollout its first service, Napster Mobile, with U.S. regional operator SunComm Wireless. It has also done a deal with Japanese wireless carrier NTT DoCoMo, and will announce a deal with “another top tier global carrier” in the fall.
So if the idea, like the Loudeye-Nokia deal, is to merge the online and mobile music services into one seamless service, then Ericsson might be a good buyer…though I would expect the consumer side of things to be with JV company Sony Ericsson, rather than Ericcson. Also, hey, Sony needs a working music service, in case anyone noticed.
And Napster aware of it too: CEo Chris Gorog said as much in the Q2 earnings call last week: “Senior management and the board are keenly aware of our strategic position and are vigilant and proactive in examining opportunities for our shareholders. We continue to receive a lot of interest in the company and would like to assure our investors that we will always carefully weigh any value creation alternatives against the opportunity and risk associated with continuing as a stand-alone company.”
Related:
Earnings: Napster Revs Up 34 Percent In Q2; Loss Narrows; Ties With DoCoMo; M&A Still On Plate
Napster’s First Mobile Rollout With Suncom Next Week; Ties With DoCoMo For Napster To Go