Sound familiar? It’s not far from the business model of MusicMaker.com, with whom EMI partnered to offer downloadable tracks and custom CDs last year.
Only after MusicMaker’s splashy IPO was it revealed that EMI’s involvement was non-exclusive; shareholders subsequently filed a class-action suit alleging EMI and MusicMaker had colluded to inflate the stock’s value by misrepresenting EMI’s intended involvement. EMI’s limited involvement with the site was doubtless a contributing factor in the decline of its stock.
The venture’s IPO, it has further been charged, helped EMI present a rosier financial picture as it attempted to find corporate suitors.
A recent statement from MusicMaker’s lawyer declined to comment on the specific charges.
Observers wonder if the Right Stuff venture—with a new digital partner—will color perception of EMI’s intentions.
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