CDNow, Inc. (Nasdaq: CDNW) rose 13/16 to 4 11/16 Friday after Mexico’s Grupo Carso SA disclosed a 9.2 percent stake in the ailing music e-tailer, and said it is in talks about buying more shares.
Grupo Carso; its head, Carlos Slim Helu; and members of his family hold 3.025 million CDNow shares, which they purchased for about $52.8 million, according to a Schedule 13D filed last week with the U.S. Securities and Exchange Commission (SEC). The Mexican firm said it is “currently engaged in discussions with the company regarding a possible additional investment.” There has been no decision on the “amount, form or timing” of any investment, the filing said.
CDNow has been struggling to find cash, even as revenues continue to rise. The company lost $37.8 million, or $1.23 a share, in the first quarter, and its shares are trading almost 90 percent below their all-time high. The company’s troubles came to light earlier this year, when a planned merger with Columbia House, the mail-order music company owned jointly by Sony Corp. and Time Warner, Inc., collapsed.
CDNow has been working with Allen & Co. to find a new buyer.