Fiscally faltering online music store CD Now, once valued by market cupidity at over $1 billion, has been bought by German media giant Bertelsmann for just $117 million.
At peak value, CD Now’s shares were $22.60; yesterday they passed to Bertelsmann for $3 per share – a marginal premium on their current market value of $2.90.
Formerly one of the world’s best-known online brands, CD Now’s decline is due partly to investors’ disenchantment with internet stocks in general, and partly to cash flow problems caused by lingering in the red for longer than predicted. The latest forecast prior to acquisition was that the company would finally move into the black in the fourth quarter of 2002.
The Bertelsmann deal comes less than three months after a Mexican billionaire ploughed $52.8m into the music retailer following a public SOS that it could not continue beyond this summer without a hefty cash injection..
News source: BBC Online Business News (UK)