It was buried in Napster’s (NAPS) earnings press release (and buried again in my late-hours earnings roundup) but there could be something more than a routine board appointment in the news that former News Corp. exec Ross Levinsohn has been named a director of the digital music company.
Darren Aftahi, an analyst with ThinkEquity Partners, notes that Levinsohn’s tenure will only last until the company’s mid-October annual meeting. Given his role in News Corp.’s acquisition of MySpace, he asserts in a research note Friday, “an M&A scenario for NAPS has a higher probability today than previously.” He says the appointment is “not a clear signal that the company will be sold,” but nonetheless is “an interesting turn of events.”
Aftahi thinks the company could be worth anywhere from $4.50 to $8.50 a share; he says recent deals have been priced anywhere from 1.5 to 6 times revenues. Aftahi has a price target on the stock of $6.
Napster Friday was down 4 cents at $4.05.