Liquid Audio Scores a Hit
April 6, 2000
by Kirsten Sharett
News that Liquid Audio Inc. (NASDAQ: LQID) signed a licensing contract with International Business Machines Corp. and a marketing/distribution contract with BMG Entertainment was music to investors' ears.
Shares closed up 26% or 2 11/16 at 13, after climbing as high as 14 7/16 during the day.
Lehman Brothers analyst Michael Stanel reiterated his 'buy' rating with a 12-month target price of $100 a share. Not bad for a stock that recently hit a 52-week low of 9 3/8.
The contracts with IBM and BMG allow Liquid Audio to enhance its technology and then prove what the upgrade can do for customers. With support from the world's largest information technology firm, IBM, and clients like media behemoth BMG, the market is betting Liquid Audio can't go wrong.
IBM's Electronic Media Management System will license its digital rights management technology to Liquid Audio to integrate into its Liquid Music Distribution System. Once IBM's technology is integrated, Liquid Audio will offer the multi-vendor solution to BMG to assist it with its digital music download plans, which BMG laid out today.
BMG Entertainment plans to begin aggressively offering content-rich music and titles in digital music downloads through various online retailers. Liquid Audio's software, now enhanced by IBM's technology, will be able to control the flow of content from creation to delivery.
?By adding support for IBM's DRM technology, we plan to enable content owners to manage the flow of content from the point of creation to retail delivery,? said Gerry Kearby, Liquid Audio CEO. ?This simplifies all aspects of content creation and third-party integration, while providing a unified catalog presentation to retailers and a consistent reporting infrastructure for everyone.?
Liquid Audio has a market cap of $284.4 million.
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