Roxio gains on MSFT report
By Mike Tarsala, CBS.MarketWatch.com
Last Update: 10:55 AM ET Feb. 25, 2004
SAN FRANCISCO (CBS.MW) -- Roxio shares gained as much as 12 percent Wednesday after a story in the New York Post's online edition said Microsoft has been "quietly shifting some of its marketing muscle" to Roxio's Napster digital music service.
Microsoft has remained neutral, supporting many digital-music players and online music stores. But continued success of iTunes "may prompt Microsoft to abandon its practiced neutrality," the Post said, noting that Microsoft has given prominent placement to Napster on its Media Center personal computers, and Napster is one of only two companies to have a branded version of Microsoft's digital-music player software.
In recent dealings, Roxio shares (ROXI: news, chart, profile) rose 28 cents, or 8 percent, to $3.82. The stock had risen as much as 12 percent to an intraday high of $3.98.
Many analysts still have competitive concerns about Roxio. The company recently lost a potential deal to market Napster with computer maker Hewlett-Packard. Apple (AAPL: news, chart, profile) won the business partly because it offered to bundle iTunes with computers, and also sell H-P-branded (HPQ: news, chart, profile) iPod digital music players.
Still, B. Riley & Co. analysts upgraded Roxio's stock earlier this week to "neutral" from "sell", based on Roxio's stock price.
Before Wednesday's run, Roxio shares had been trading at less than one times Roxio's total fiscal 2005 revenue. The 25 largest software companies trade at about four times their revenue estimates for the end of 2004, on average.
Analysts polled by Thomson First Call project that Roxio will continue to lose money in calendar 2004, posting a loss of about $1.02 a share in its fiscal year ended March 2005.
Mike Tarsala is a San Francisco-based reporter for CBS.MarketWatch.com. |
