Archive for the ‘Napster, Inc. NAPS’ Category

Napster, Inc. (NAPS) to be Acquired by Best Buy Co., Inc. (BBY) for $2.65 per Share in Cash

Wednesday, September 17th, 2008

Best Buy Co., Inc. (NYSE: BBY), a multinational retailer of technology and entertainment products and services, and Napster Inc. (NASD: NAPS), one of the most recognized brands in digital music and a leading provider of online music for the consumer market, recently announced that the two companies have entered into a definitive merger agreement for Best Buy to commence a tender offer for all outstanding Napster shares at a price of $2.65 per share in cash.

With an aggregate purchase price of roughly $121 million (or $54 million net of approximately $67 million in cash and short-term investments of Napster as of June 30, 2008), the proposed acquisition includes Napster’s 700,000 digital entertainment subscribers, its Web-based customer service platform and mobile capabilities. The transaction is subject to customary closing conditions and is expected to be completed during the fourth calendar quarter.

Brian Dunn, the president and chief operating officer of Best Buy stated that, “This transaction offers Best Buy a recognized platform for enhancing our capabilities in the digital media space and building new, recurring relationships with customers. Over time we hope to strengthen our offerings to consumers, who we believe will increasingly seek devices and solutions that enable them to access their content wherever, whenever and however they want.”

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Best Buy Co. Inc. (BBY) and Napster Inc. (NAPS) Coming to One Store Near You in $121M Deal

Monday, September 15th, 2008

Maybe you’re thinking Best Buy Co. Inc. (NYSE: BBY) and Napster Inc. (Nasdaq: NAPS) were dominating giants in their respective industries. Now the two companies have announced they will merge into a mega-media company through a definitive agreement worth approximately $121 million. Best Buy will offer all outstanding Napster shares for $2.65 per share in cash.

Napster recently launched one of the world’s largest MP3 stores and posted fiscal 2008 revenue of $127.5 million, up 15 percent from the year prior; a loss of $16.5 million, as compared to a loss of $36.8 million the prior fiscal year; and positive cash flow for the fiscal year ended March 31, 2008.

Unanimously approved by Napster’s board of directors, the acquisition will include around 700,000 of Napster’s digital entertainment subscribers, its Web-based customer service platform, and its mobile capabilities.

“This transaction offers Best Buy a recognized platform for enhancing our capabilities in the digital media space and building new, recurring relationships with customers,” Brian Dunn, president and COO of Best Buy stated in the press release. “Over time we hope to strengthen our offerings to consumers, who we believe will increasingly seek devices and solutions that enable them to access their content wherever, whenever and however they want.”

Los Angeles-based Napster has approximately 140 employees. Best Buy does not plan to move Napster’s headquarters or make significant changes in personnel. Napster CEO Crhis Gorog and key members of the company’s senior management have secured employment positions in the new deal.

Best Buy said it thinks the capabilities of both companies will allow for the emergence of a company with the ability to build stronger relationships with customers, expand the number of subscribers, and generate recurring revenue.

“We believe Napster brings us excellent capabilities in the mobility space, as well as international operations and an established team of technology experts,” Dave Morrish, executive vice president of Connected Digital Solutions of Best Buy stated. “We can foresee Napster acting as a platform for accelerating our growth in the emerging industry of digital entertainment, beyond music subscriptions. We’re very excited to add these capabilities to leverage our existing relationships with the labels, the studios, and the hardware providers. We believe Napster will be an outstanding addition to our already robust portfolio of partners and offerings in the digital music space.”

Subject to regulatory conditions, the deal is expected to be finalized during the fourth quarter.

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Napster, Inc. (NAPS) Announces Revenue Increase of 24%

Thursday, November 1st, 2007

Earlier today, Napster (NAPS) reported corporate balance sheets. According to these fiscal results, net revenue for the second quarter of fiscal year 2008 has grown to $31.6 million, an increase of 24% from the $25.5 million revenue reported during 2007. Net loss for the second quarter of fiscal 2008 narrowed to $5.1 million, or $0.12 per basic and diluted share. Compared to the net loss of $9.0 million or $0.21 per basic and diluted share in the second of 2007, this represents a significant increase in the company’s cash flow.

Napster ended the second fiscal quarter with $68.4 million of cash, cash equivalents and short-term investments, an increase of $1.3 million from the prior quarter. As of September 30, 2007, Napster had approximately 750,000 paid subscribers. Since June 30, 2007, subscribers have decreased from 770,000 to 750,000, an anticipated decrease based on historical quarterly patterns.

Chris Gorog, Napster’s chairman and CEO, stated “Napster grew quarterly revenues 24 percent year-over-year and generated a record $1.3 million in positive cash flow in the second quarter while substantially narrowing our net loss year-over. We recently launched Napster 4.0, the web-based version of our flagship product, to strong reviews. Napster Mobile is maintaining its leadership position as the global music solution of choice among the world’s leading carriers, and AT&T recently announced over-the-air availability of Napster, providing instant access to music for its wireless customers. We remain focused on our strategy of providing our customers with access to unlimited music anywhere, anytime.”

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Napster, Inc. (NAPS) Debuts New Web-Based Offering

Tuesday, October 16th, 2007

Napster Inc (NAPS), an infamous internet based music service company, announced that it will allow users to play downloaded music from any computer without having to download any additional software. The strong move by the company could attract a greater customer base.

Before this new program was announced, Napster subscribers could only listen to their music after they finished downloading the Napster software application on their personal computers. This model was similar to the Apple Inc. (AAPL) iTunes Music Store, an application that controls 70% of all digital music sales.

Napster now sells subscription services that range from 10 dollars to 15 dollars a month, depending on the features one chooses. By paying this premium, users can stream or download an unlimited number of songs from its 5 million-strong library.

Christopher Allen, Chief Operating Officer at Napster, commented, “With this new platform Napster can easily be integrated into consumer electronics devices or integrated into other Web sites such as social networking sites.”

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Napster, Inc. (NAPS) Unique Music Distribution Service Widely Appeals to Consumers

Thursday, August 2nd, 2007

Napster’s music service allows customers to download an unlimited amount of music while staying within the guidelines set by the United States. For their subscription fee, users can explore thousands of songs and transfer them to their MP3 players.

The company’s business strategy has been recognized by top media publications such as PC Magazine, The New York Times, Cargo, Associated Press, and Hartford Courant. The New York Times stated, “When used to its fullest extent, Napster To Go lays iTunes flat”.

All the digital music files are encoded as high-quality 192Kbps WMAs in order to deliver the purest form of audio. The music service also offers radio stations, which can be customized based on the customer’s music library.

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