MP3.com Shares Soar in Wake of Sony Settlement
MP3.com Inc. shares rose 21% after the Internet music company said it reached a settlement with Sony Corp.’s Sony Music Entertainment to end a copyright infringement lawsuit.
MP3.com rose $1.59 to close at $9.34 on Nasdaq. Earlier, the stock touched $11, or 83% below the 52-week high of $64.63, reached Nov. 8. Sony’s American depositary receipts, each representing one ordinary share, rose 69 cents to close at $97.13 on the New York Stock Exchange. The companies didn’t disclose terms of the accord.
The Sony agreement is MP3.com’s fourth settlement with a major record company. Seagram Co.’s Universal Music Group, the world’s biggest record company, is the only big music distributor that hasn’t yet struck an agreement. A settlement could come before Aug. 28, the scheduled trial date for MP3.com, which has been sued for allegedly infringing on the record companies’ copyrights through its My.MP3.com service.
“When this is all done, MP3.com will be the only site on the Internet doing this type of music business legally,” said Heath Terry, an analyst at Credit Suisse First Boston who rates MP3.com shares a “buy.”
Universal Music Group declined to comment.
The My.MP3.com service enables consumers to make their personal music libraries portable by allowing subscribers to download recordings that are stored in the company’s Internet library.
Analysts estimated that MP3.com is paying Sony about $20 million in exchange for allowing the company to include its recordings in its music library.
MP3.com previously settled with Time Warner, EMI Group and BMG Entertainment.
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