Markets & Finance

USB Piper Lowers Roxio to 'Outperform'


USB Piper downgraded Roxio (ROXI) to outperform from strong buy.

Analyst Gene Munster says he downgraded on the appointment of Nand Gangwani as Roxio's new CFO. He thinks the introduction of a new CFO changes the risk profile of Roxio over the near term. He says the company is undergoing the restructuring of its software business and the launch of Napster.

Munster says initial data for the first week of Napster showed download tracks (300,000) slightly below his estimate. He thinks it needs to average 360,000 downloads per week for the December quarter to meet Roxio's compliance. He notes that it's too early to judge if Napster will be a long-term success. Munster says he would view Roxio shares, which are under pressure today, as a buying opportunity for long-term investors looking to play the shift in music distribution.


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