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July 13, 1999 |
MP3.com, expected to go public this week, announced Monday that it is increasing its initial offering by 3.3 million shares -- for a total of 12.3 million shares. Those additional shares are being snatched up by French investment firm Groupe Arnault, which usually invests in luxury-goods companies like Moet Hennessy Louis Vuitton, according to Bloomberg News. Meanwhile, MP3.com also announced that it has raised its initial offering price from the $9-to-$11 range to the $16-to-$18 range, nearly doubling the price per share. The total valuation of MP3.com after these announcements: $1.2 billion. And that's before the IPO; with the market's recent history of tech-stock mania, it's probably a fair bet that that valuation will be bid up even further by day traders. Consider that MP3.com's popularity stems from the free music and software it offers, that its revenue model is still murky and that its main product is a music format that just a year ago was being dismissed as a niche market for college kids and music dilettantes: Now, any questions about what media buzz can do for a Net IPO? This must be galling for the Recording Industry Association of America, which would like nothing better than to stamp out the piracy-friendly MP3 format. Its own SDMI music format specifications will be released within the next few weeks; will these technical announcements be overshadowed by MP3.com's IPO?
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About the writer Table Talk Sound off Related Salon stories No fear of an MP3 planet As Public Enemy embraces new music technology and takes on the recording industry, it's also helping smash the Web's lily-white image.
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