Shares of online music retailer CDNow rocketed 3-7/16 to 19-3/8 on Friday, as rumors about the company being bought continued to swirl. Time Warner (NYSE: TWX) and BMG, which is a division of German media power Bertlesmann, are among the potential suitors being mentioned. CDNow’s trading volume was heavy on Friday, with more than 4.5 million shares changing hands, compared to the daily average of less than 700,000.
CDNow is trading at about half of its 52-week high of 39-1/4 and could fetch a nice premium in a buyout. The company is facing new pressure as Amazon.com (Nasdaq: AMZN) continues to expand its music presence. For CDNow, joining a bigger player could be a beneficial move.