MP3’s Shares Soar on Plans for New Service
Shares of online music provider MP3.com Inc. had been languishing below last summer’s initial public offering price, but on Thursday they surged up the charts, nearly doubling.
The stock (ticker symbol: MPPP) snapped to life on optimism that the company will offer a new service despite a pending lawsuit.
San Diego-based MP3.com soared $15.63, or 95%, to $32 on Nasdaq after company managers spoke at a Robertson Stephens investment conference in San Francisco. In Thursday’s after-hours session, the volatile shares slid back below the IPO price, to $27.88.
The stock sold for $28 in July’s IPO and rocketed to lose at $63.31 on the first day, but recently fetched as little as $15.
MP3.com has been sued by a recording industry trade group over its plan to deliver music to users via the Internet from its database of 60,000 CDs, which the trade group claims is a copyright violation. The company has recently been telling investors that it may now press forward with the service by asking users to post their own CDs on the Internet, instead of using its database, said Phil Leigh, an analyst with Raymond James.
“It implies that the company will be permitted to implement this new business model,” said Leigh, who said he outlined such a possibility in a Feb. 25 research note.
