In May 2007, Last.FM was acquired by CBS for $280 million.Â Based on that acquisition price, major active shareholders in Napster Inc. (NASDAQ:NAPS) argue that the company should be worth just as much if not more.Â The shareholders that have been pushing for management shifting and strategy changes at Napster are Perry H. Rod, Thomas Sailors, and Kavan P. Singh.Â
Napster actually has over 700,000 paying customers, yet their market value is zero (market cap of about $69 million minus their saleable assets).Â The reason why Napster is trading low is because of a â??lack of confidence in governance” stated the shareholders.
Last.FM was a private company with a close-knit community of users when they were acquired.Â Napster is a public company that was a has-been music sharing site in the early 2000’s back when it was making Metallica and Dr. Dre mad and Shawn Fanning was one of the most well known people in the tech industry.Â CBS acquired Last.FM because they were ramping up their Radio services and even signed a partnership with AOL.Â Last.fm currently has over 21 million active users in 200 countries.Â
Should Napster be worth close to $280 million?Â I’m not an active shareholder, but I’d have to say no because their user-base just isn’t that big.Â