Continue reading Best Buy's Napster takes a value stab at Apple's iTunes

Best Buy's Napster takes a value stab at Apple's iTunes originally appeared on BloggingStocks on Wed, 20 May 2009 18:20:00 EST. Please see our terms for use of feeds.

Beleaguered Napster (NYSE: NAPS) shareholders got a nice surprise today. That is, Best Buy (NYSE: BBY) agreed to buy the online-music operator for $2.65 per share. On the news, the stock price surged 86%. Although, it's still a relatively small deal - amounting to about $121 million.

Something else: Napster already has about $67 million in the bank.

All in all, it looks like a good move for Best Buy. After all, the music CD market is evaporating.

For the most part, Napster has about 700,000 subscribers (there is a monthly fee), which should get a nice boost from the huge distribution of Best Buy. In fact, the platform could eventually allow for other digital offerings, such as videos.

Of course, there is tremendous competition in the space, such as from Amazon.com (NASDAQ: AMZN) and Apple (NASDAQ: AAPL). However, Best Buy can certainly find creative ways to bundle products and services -- making things compelling for its customers.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

Best Buy nabs Napster originally appeared on BloggingStocks on Mon, 15 Sep 2008 13:46:00 EST. Please see our terms for use of feeds.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Abercrombie & Fitch Co. (NYSE: ANF) posted solid Q2 results despite touch economic conditions.
• Apollo Management LP swung to a net loss on a write down and litigation, but is on track for an IPO.
• Cree Inc. (NASDAQ: CREE) beat analysts' expectations and raised its revenue guidance.
• Dr Pepper Snapple Group Inc. (NYSE: DPS) beat earnings estimates and raised its full-year guidance.
• 4Kids Entertainment Inc. (NYSE: KDE) widened its Q2 net loss more than analysts had anticipated.
• Kohl's Corp. (NYSE: KSS) topped Q2 expectations and raised its full-year guidance.
• Lions Gate Entertainment Corp. (NYSE: LGF) unexpectedly swung to a Q1 profit as revenues soared.
• Macy's Inc. (NYSE: M) beat Q2 expectations despite lower sales, and warned of weakness ahead.
• Napster Inc. (NASDAQ: NAPS) Q1 net loss matched the previous quarter and the year-ago loss.
• Nordstrom Inc. (NYSE: JWN) beat Q2 expectations despite a drop in earnings and lowered its guidance.
• Sirius XM Radio Inc. (NASDAQ: SIRI) CEO predicted post-merger earnings next year.
• Thomson Reuters Corp. (NYSE: TRI) Q2 profit fell while revenue soared, but still missed estimates.
• UBS (NYSE: UBS) dismal Q2 results were accompanied by speculation of breaking up the bank.
• Wachovia (NYSE: WB) revised its Q2 loss to include auction rate securities settlements.

Also, Jim Cramer warns against bearishness on the financials and also suggests that the collapse of commodities will buoy earings.

For more highlights from this week, see: Wal-Mart, JCPenney, MBIA, Deere, Applied Materials and others

Upcoming quarterly reports include Lowe's (NYSE: LOW), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), Target (NYSE: TGT), La-Z-Boy (NYSE: LZB), Saks (NYSE: SKS), BJ's Wholesale (NYSE: BJ), Limited Brands (NYSE: LTD), Barnes & Noble (NYSE: BKS), Burger King (NYSE: BKC), Gap (NYSE: GPS), Heinz (NYSE: HNZ), and Intuit (NASDAQ: INTU).

Visit AOL Money & Finance for more earnings coverage.

Earnings highlights: Abercrombie, Macy's, Kohl's, Sirius, UBS, Wachovia and others originally appeared on BloggingStocks on Sat, 16 Aug 2008 09:40:00 EST. Please see our terms for use of feeds.

Napster (NASDAQ: NAPS), a digital-music-download entity that competes with Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Wal-Mart (NYSE: WMT) and Yahoo! (NASDAQ: YHOO), cued up its Q1 numbers on Monday after the bell. The top line decreased 6% to $30.3 million. The bottom line showed a net loss of 10 cents per diluted share, same as last year's results. In fact, the company lost a dime per share in the previous quarter. Must be something special about that number. Anyway, according to Briefing.com, Napster missed Wall Street estimates by one penny.

Gross margin for the quarter was flat at 27% when comparing to year-over-year data, but it did represent an increase over the 26% gross margin from the previous quarter. That's got to count for something, right? No, it doesn't. Neither does the press release's promotion of the new MP3 initiative. I could care less. Napster is an equity trading at a very low price, it's racking up losses, and it'll never become a serious threat to Apple and the iPod/iTunes empire. A good investment this is not.

The stock was down 10% in yesterday's after-hours session. I'm not sure where it will close in the regular session today, but Napster isn't where I want to be. There are better ideas out there, Apple certainly being one of them. I know that the stock snapshot shows it has been strong in the last month or so, but I'm not inclined to read too much into that in this particular case. For me, it's about stock price (too low) and brand equity (not powerful enough). Apple and iTunes sing a much better song than Napster, in my opinion...

[Editor's note: At 8:12 a.m. NAPS shares traded 2.7% higher]

Disclosure: I don't own any company mentioned; positions can change at any time.

Napster misses expectations in Q1, should be avoided by investors originally appeared on BloggingStocks on Tue, 12 Aug 2008 09:06:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• People with the matter said that Ken Wilson, The Goldman Sachs Group Inc's (NYSE: GS) most senior financial-institutions broker, will temporarily exit the firm, the Wall Street Journal reported, in an effort to advise Treasury Secretary Henry Paulson on how to resolve the country's banking crisis.
• The American Federation of State, County, and Municipal Employees, a union with a stake in Citigroup Incorporated (NYSE: C) called for the financial services company to break itself up. The Financial Times reported that the demand will almost definitely be rejected by Citigroup.

• Treasury Secretary Henry Paulson's plan for rescuing Federal National Mortgage Association (NYSE: FNM) -- Fannie Mae -- and Federal Home Loan Mortgage Corporation (NYSE: FRE) -- Freddie Mac -- calls for the creation of a new regulatory agency that would seek to assert more stringent control over the banks and lessen the damage they could cause to the American financial system, the New York Times reported.
• The Daily Telegraph reported that BP Plc (NYSE: BP) blocked a $1.8B dividend payment to its Russian partners in the TNK-BP joint venture.

• According to paidContent.org, now that its cash on hand exceeds its market cap, speculation that Napster Inc (NASDAQ: NAPS) could be a takeover target heated up.

Newspaper wrap-up: Union wants Citigroup to break itself up originally appeared on BloggingStocks on Mon, 21 Jul 2008 08:57:00 EST. Please see our terms for use of feeds.

With the plunge in the equities markets, there are certainly some compelling opportunities. Just look at Napster Inc. (NASDAQ: NAPS), an online music operator. The company has $69.8 million in the bank and a market cap of $66.4 million. Yes, Wall Street is valuing the business at below zero.

Well, hedge funds are taking notice (this is a according to Bloomberg.com). For example, Eminence Capital LLC has increased its equity stake to a cool 9%. This is usually the first step in forcing a company to sell out.

One possibility is for Napster to go private. However, this will probably not carry much of a premium.

Instead, I'm sure the hedgies want Napster to get an offer from a strategic player, such as RealNetworks (NASDAQ: RNWK). Oh, and another possibility is JDS Capital Management Inc., which owns eMusic.com. Keep in mind that the firm purchased one million shares of Napster in Q1.

Actually, Napster controls about a majority of the U.S. online music subscription market. The problem: it's a niche market.

So, with hedge funds swarming, it's going to be tough for Napster to ignore things. In fact, in Friday's trading, the company's shares spiked 27% to $1.39 as the rumors buzzed.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Hedge funds taking notice of Napster originally appeared on BloggingStocks on Sun, 20 Jul 2008 10:10:00 EST. Please see our terms for use of feeds.

Shares of Napster (NASDAQ: NAPS) rose more than 27% on Friday on speculation that the online seller of MP3s could be a takeover target at its current depressed share price.

The bullish case is easy to understand. The Napster name and site must be worth something and, before Friday's run-up, the company had a market cap of $52.1 million and $69.8 million in cash. Given Napster's iconic status as the beginning of music piracy, it's hard to imagine that the stock could be so cheap. Wouldn't the brand be worth something to anyone in the music download business? It's instantly recognizable and it would take many millions in advertising to create such a brand from scratch.

So I'm in complete agreement with the shareholders and analysts -- this company should be sold, and such a move would likely generate tremendous value for shareholders. But there's another side: as a stand-alone public company, Napster is a ticking time bomb.

Continue reading Napster soars on takeover rumors

Napster soars on takeover rumors originally appeared on BloggingStocks on Sun, 20 Jul 2008 09:40:00 EST. Please see our terms for use of feeds.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Agilent Technologies Inc. (NYSE: A) beat Q2 expectations and offered Q3 and full-year guidance.
• Barnes & Noble Inc. (NYSE: BKS) widened its Q1 loss but maintained its full-year profit forecast.
• Campbell Soup Co. (NYSE: CPB) Q3 profit rose due to the sale of Godiva, but shares tumbled.
• Fluor Corp. (NYSE: FLR) beat Q1 expectations and offered rosy full-year guidance.
• Gamestop Corp. (NYSE: GME) posted record Q1 earnings but offered weak Q2 and full-year guidance.
• Hewlett-Packard Co. (NYSE: HPQ) posted strong Q2 results in the wake of its announced EDS acquistion.
• Hot Topic Inc. (NASDAQ: HOTT) Q1 loss widened due to declines in same-store sales.
• Kenexa Corp. (NASDAQ: KNXA) beat Q1 expectations and raised its full-year guidance.
• Medtronic Inc. (NYSE: MDT) posted flat Q4 earnings despite strong sales, and missed full-year estimates.
• Napster Inc. (NASDAQ: NAPS) narrowed its loss and exceeded analysts' Q1 epectations.
• Ross Stores Inc. (NYSE: ROST) Q1 profits rose on same-store growth and a real estate settlement.
• Staples Inc. (NASDAQ: SPLS) swung to a modest Q1 profit after two quarterly losses.
• Target Corp. (NYSE: TGT) Q1 profits slipped but came in ahead of analysts' estimates.
• Tween Brands Inc. (NYSE: TWB) Q1 profit was hurt by a one-time charge but still beat expectations.

Additional earnings highlights:
Home Depot, Gap, Lenovo, Air France, Activision, Suntech and others
Ford, Hormel, Limited Brands, Intuitive Surgical, PetSmart and others

Upcoming results to watch for include Borders (NYSE: BGP), Polo Ralph Lauren (NYSE: RL), TiVo (NASDAQ: TIVO), Big Lots (NYSE: BIG), Costco (NASDAQ: COST), Dell (NASDAQ: DELL), HJ Heinz (NYSE: HNZ), Sears (NASDAQ: SHLD), Lions Gate (NYSE: LGF), and Tiffany (NYSE: TIF).

Visit AOL Money & Finance for more earnings coverage.

Earnings highlights: Hewlett-Packard, Target, Barnes & Noble, Campbell, Staples and others originally appeared on BloggingStocks on Sat, 24 May 2008 14:40:00 EST. Please see our terms for use of feeds.

Napster (NASDAQ: NAPS), a music-download service, reported Q4 and full-year results on Wednesday. I must admit, for a very low single-digit stock, the results seemed pretty cool.

For the fourth quarter, revenues increased about 6% to $30.8 million and the net loss for the quarter came in at $0.10 per diluted share; this was much better than the loss of $0.20 per diluted share seen in last year's comparable quarter, which also included $0.03 attributable to discontinued operations. Briefing.com says this performance beat Wall Street's expectations by three pennies. For the full fiscal year, the top line increased a nice 15% to $127.5 million and the bottom-line loss was $0.38 per diluted share versus a net loss of $0.85 per diluted share in fiscal 2007. Perhaps even more important is the fact that Napster is, according to the release, generating positive cash flow, an achievement the company has kept up for four quarters now.

Of course, the big story this week is Napster's attempt at upping its game against competitors such as Apple (NASDAQ: AAPL), Wal-Mart (NYSE: WMT), and Amazon (NASDAQ: AMZN) by opening a music-download site dedicated to the sale of MP3 tunes (I wrote an post on the subject, and so did Richard Driver). This is meant to broaden the company's appeal by going after consumers who don't necessarily dig the subscription model. I'll tell you, though, it's going to be a long while before Napster supplants the dominance of the iTunes store.

Continue reading Napster (NAPS): Still not music to my ears

Napster (NAPS): Still not music to my ears originally appeared on BloggingStocks on Thu, 22 May 2008 10:47:00 EST. Please see our terms for use of feeds.

So, according to this piece out on Reuters, Napster (NASDAQ: NAPS) is in a fighting mood. It recently created an MP3 download site that contains over six million tunes. Apple (NASDAQ: AAPL) has been doing gangbuster business for years with its iTunes juggernaut, so it only stands to reason that from now until doomsday there will be initiatives aimed at stealing a little bit of the big guy's thunder. Whether it's Amazon (NASDAQ: AMZN) or Wal-Mart (NYSE: WMT), Apple will always have challengers.

Question is, does this matter? Should Steve Jobs and his Apple shareholders be shuddering in their collective boots? Probably not, although any competition should be taken seriously, I suppose. I grant you that Napster is a recognizable name when it comes to web-based music commerce (heck, Napster started all the peer-to-peer ruckus way back when), and that six million compositions represents an awesome depth of musical inventory, But come on, Apple has staked out one of the most vital components of a successful business: unmatched brand equity.

Simply put, Apple's brand in music downloads is as powerful and iconic as Coca-Cola's brand is in soft drinks. Yes, the Napster service, according to the article, will have an important competitive component, namely the ability to transfer songs to other devices, including the iPod. Napster, as many of you probably know, markets a subscription-based service, but you can bet that management will now concentrate on this download asset.

Continue reading Should Steve Jobs fear the Napster offensive?

Should Steve Jobs fear the Napster offensive? originally appeared on BloggingStocks on Wed, 21 May 2008 12:20:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Deutsche Bank upgraded China Petroleum & Chemical Corporation (NYSE: SNP) to Buy from Hold on valuation following the recent sell-off.
• ThinkEquity upgraded Syniverse Holdings Inc (NYSE: SVR) to Buy from Accumulate citing growth from further price reductions and adoption of new technologies that will drive transaction volumes.
• Allegheny Technologies Incorporated (NYSE: ATI) was raised to Buy from Neutral at Goldman.The firm upgraded Allegheny based on valuation, low stainless steel inventories, and nickel price stabilization.

• Napster Inc (NASDAQ: NAPS) was upgraded to Outperform from Peer Perform at Bear Stearns.
• Goldman raised Raytheon Company (NYSE: RTN) to Neutral from Sell.
• Johnson Controls Inc (NYSE: JCI) was upgrade to Buy from Add at Calyon.

Analyst upgrades: SNP, SVR and ATI originally appeared on BloggingStocks on Mon, 11 Feb 2008 09:44:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• JP Morgan downgraded shares of Cisco Systems Inc (NASDAQ: CSCO) to Neutral from Overweight following its Q2 results, as they believe the company's international exposure is not enough to offset slowing in North America and Europe. Shares were also downgraded to Neutral from Outperform at Baird, citing the meaningful slowdown in fundamentals.
• Lehman downgraded Virgin Mobile USA Inc (NYSE: VM) to Equal Weight from Overweight based on reduced visibility following its Q4 report.
• Polo Ralph Lauren Corporation (NYSE: RL) was lowered to Hold from Buy at Citigroup, as they believe the company is facing fundamental challenges in key markets and a lack of visibility on the Japanese market. They see more upsideelsewhere.

• Bear Stearns downgraded BT Group Plc (NYSE: BT) to Peer Perform from Outperform.
• Think Equity lowered Napster Inc (NASDAQ: NAPS) to Accumulate from Buy.
• UBS downgraded Elbit Systems Ltd (NASDAQ: ESLT) to Neutral from Buy.

Analyst downgrades: CSCO, VM and RL originally appeared on BloggingStocks on Thu, 07 Feb 2008 10:06:00 EST. Please see our terms for use of feeds.

Napster

Continue reading Napster plans for user-friendly MP3s

Napster plans for user-friendly MP3s originally appeared on BloggingStocks on Mon, 07 Jan 2008 14:22:00 EST. Please see our terms for use of feeds.

Napster brings a 5 million-song catalog to AT&T with extended deal originally appeared on BloggingStocks on Mon, 22 Oct 2007 18:20:00 EST. Please see our terms for use of feeds.