New York - Struggling digital music service Napster (NASD: NAPS), which has not posted a profit in four years and has seen its share price tumble 95% over the past six years, may be ripe for a takeover now that its nearly $70 million in cash and investments exceeds the $52.1 million its shares are valued at, Bloomberg reported.

Bloomberg noted that Napster's largest investor, hedge fund Eminence Capital, increased its stake in the company to 9% during the second quarter.

Meanwhile, JDS Capital Management -- the hedge fund that also owns eMusic -- increased its shares by 36%, having purchased a million shares in the first quarter.

Munder Capital Management also owns about 6% of the company.

"Investors are recognizing that at these levels, it's definitely an attractive takeout play for somebody,'' Piper Jaffray & Co. analyst Michael Olson told Bloomberg.

A group of dissident Napster shareholders also recently said in a filing that the company "has the dubious distinction of being worth more dead than alive," and noted CBS's recent $280 million acquisition of social streaming music service Last.fm.

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