SharkJumping

Note - we appear to have a calendar publishing problem with Typepad, so this post actually appeared 2 days ago, not today.

On the heels of the mysterious Mosaic Theory concept of Google Tunes last week (rumor is that Tom Hanks may star in the lead role), we today had the "Google buys Napster" rumor, which was reported by the known investor newspaper The , as coming from analyst Kit Spring of the investment bank Stifel Nicolaus.  Luckily the free markets reacted insanely by driving up Napster's stock over 70% in a few minutes to almost $5, before settling back down to $3.91, still 25% above the previous day's close with a trading volume massively higher than normal - see Signs of Bubble 2.0. 

The good news is that we now know the names of a public investment bank and analyst we had never previously heard of (which happened to have done a stock offering for its own stock 2 days ago).  The bad news is that there were no facts or logic involved in this speculation since Google could make far more money around music rather than providing music itself.  The analyst made the argument that Napster was valued roughly at cash value, and the value of the subscribers was far higher, ignoring the debt involved, low operating margins, and significant operating losses in the business.  Google emphatically denied the rumor, and I can't find any financial reason to support the purchase theory, outside of the need to generate news. 

But the best related segment news is that Digital Music Group IPO appears to be on track, which is a guaranteed Seinfeld episode for at least a year, especially now that Gizmondo is in Ch 11.