NEW YORK Napster, once the bane of the music industry’s existence, provided a rare safe haven for investors Monday courtesy of the company’s decision to allow retailer Best Buy to purchase it for $121 million.
The sale agreement led to an 86 percent surge in the price of Napster shares, not bad considering that Monday was one of the worst days in Wall Street trading in six years.
Napster no doubt thrilled shareholders who had been used to seeing their investment in the digital music company shrivel while Apple’s iTunes dominated the marketplace.
Napster shares had fallen 95 percent in the past six years before Monday’s announcement. They rose $1.17 to $2.53 while Best Buy said it will pay $2.65 a share for the company.
Napster boasts 700,000 subscribers to its music service, allowing users unlimited access to millions of songs for as long as they pay at least $12.95 per month.
Best Buy said it expects to keep the Napster brand name and its top executives, including Napster CEO Chris Gorog, continuing to operate the business from its Los Angeles headquarters, where it employs 140 staffers.