At a glance, the previously struggling Napster appears to have bounced back and is now doing well. As outlined in the company's fiscal first quarter financial report, the music service can boast a positive cash flow for the fifth straight quarter with revenue holding steady at about $30 million. According to Napster's brass, the company is making the right move and is in a good position moving forward. But convincing investors of that is another story altogether.
Despite the positive quarterly financial reports, Napster's stock hit an all-time low in mid-July and today is trading at less than half of what it went for one year ago. Subscribers are down 7 percent from last quarter, and a group of impatient investors have initiated a proxy battle to win seats on the board.
"It's kind of damned if you and damned if you don't," Napster chairman and CEO Chris Gorog laments. "The bottom line is, five years ago we were number 2 or 3 in the this industry, and five years later we're still number 2 or 3 in this industry."
Hit the jump to learn why Napster remains stagnant.