Napster, the once-infamous music piracy platform turned AI firm, has dropped a bombshell on its shareholders: the long-hyped $3.36 billion investment deal, announced earlier this year, isn’t happening. The revelation has left shareholders stunned and the company’s future in serious doubt.
During a recent virtual shareholder meeting, Napster CEO John Acunto disclosed that the mysterious investor behind the supposed $3.36 billion cash infusion—promised at a $12 billion valuation—will not be following through. The investment, which would have been one of 2025’s biggest, was intended to fund operations and allow shareholders to finally cash out through a long-promised tender offer. That offer is now also canceled.
In an email sent after the meeting, Napster claimed it was a “victim of misconduct” and is now cooperating with law enforcement. Despite months of teasing investors and employees with assurances of incoming funds, this marks the fourth time since 2022 that a tender offer has fallen apart at the last minute.
Red flags had been waving for months. Forbes previously questioned the legitimacy of the deal and the firm’s overall stability. Investigations uncovered lawsuits from unpaid creditors, SEC scrutiny, and exaggerated claims about partnerships with Google and Manchester City Football Club. Napster also promoted the idea of “top-tier” investors that reportedly never invested at all.
The company’s complex backstory adds another layer of confusion. In 2019, Acunto acquired the bankrupt social media firm Tsu, which then absorbed a dozen AI, drone, and virtual reality startups—often via all-stock mergers. In March, the company acquired the Napster name for $207 million and rebranded in May.
In a last-ditch effort to maintain credibility, Napster tried to name advisory firm Sterling Select as the investor. It later admitted that Sterling merely introduced other “investors,” none of whom actually delivered any money.
With lawsuits mounting and staff layoffs accelerating, Napster’s future looks uncertain—again.
