If you miss the freewheeling peer-to-peer days when the Napster (NASDAQ:NAPS) brand was all about free music, I've got another freebie for you.

The music subscription service closed out its fiscal fourth quarter in March with $69.8 million in cash and short-term investments. With just 43.7 million fully diluted shares, that translates into $1.60 a share in cash.

Now pull up yesterday's stock chart, and you'll find Napster trading as low as $1.41 after failing to wow the critics with last night's quarterly report.

Are investors really getting Napster for less than the cash on its balance sheet? Technically, they are, even if sticklers will point to some of the liability items on the balance sheet as excess baggage. However, even a value hound would concede that Napster is still trading for less than book value.

Napster must be rotten to be essentially worthless, right? Not necessarily. It's not hemorrhaging greenbacks. It just posted its fourth consecutive quarter of positive cash flow. The company has also posted a narrower quarterly loss than expected in each of the past 13 periods.

It's not shrinking in popularity, even if growing revenue by a mere 6% to $30.8 million is as inspiring as a Backstreet Boys reunion tour.

So why is Napster falling after its earnings report? Well, the company is looking for just $30 million to $31 million in revenue during the first quarter, less than the $32.3 million it posted a year ago.

Whether Napster is going backward or barely inching forward, the truth is Napster is stuck.

It's not that Napster isn't trying. Unfortunately, music subscription services are a hard sell for consumers, and Napster deals for mobile streaming through AT&T (NYSE:T) and digital downloads through XM Satellite Radio (NASDAQ:XMSR) haven't been gold mines.

Napster isn't alone. RealNetworks (NASDAQ:RNWK) has Rhapsody America. Microsoft (NASDAQ:MSFT) has the Zune Pass. They're not setting the world on fire, despite the allure of paying one flat price for unlimited media streaming on portable devices.

Napster recently took the bold step of offering its entire catalog of 6 million tracks for sale as piecemeal downloads, creating the world's largest MP3 store, but unless Napster finds a way to get the Apple (NASDAQ:AAPL) logo to trick consumers, the masses will continue to flock to Apple's iTunes Music Store.

Keep trying, Napster. Keep protecting those greenbacks, too. Sooner or later, something's got to give.

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