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Friday, Aug 12, 2022

Three Shareholders Wage Proxy Battle With Napster

Three shareholders of Napster Inc. are seeking election to the board in an effort to change the struggling digital music company’s strategy.

Perry Rod, Thomas Sailors and Kavan Singh are preparing an independent proxy after their May 21 application to Napster’s board for nomination was rejected June 13, according to a regulatory filing with the U.S. Securities and Exchange Commission filed late Thursday.

The three shareholders hold 1.7 percent of the company stock. They said they want seats on the Los Angeles-based company’s board because current management had not been aggressive enough in battling rival Apple Inc. as well as Internet piracy.

The three shareholders asked other shareholders to vote for them, as well as on proposals to separate the roles of chairman and chief executive and on a bylaw to require a majority vote for the election of directors.

The group also criticized Napster’s management strategy saying that over a number of years it had a “just wait it out’ mentality” in trying to wrestle away market share from Apple and for Internet piracy to decrease.

Napster declined to comment.

Rod, 29, is an independent investor from Encino, Sailors, 49, is a managing member of Cloverdale Investments LLC, and Singh, 26 is an entrepreneur.

They said Napster’s shares would be priced at $6.40 for a strategic buyer based on a comparative valuation of the $280 million CBS Corp. paid for digital music site Last.fm. They did not name any possible buyers. They added that based on their appraisal, Napster shares would be worth $1.79 if the company were liquidated.

Shares in Napster were down 1 percent to $1.46 in early trading Friday.


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