The speculation about Napster’s (NSDQ: NAPS) fate has been going on ever since it relaunched under the new management, and once again, some new fuel to it: Bloomberg did a piece earlier today, noting that company could become takeover bait for hedge funds as its cash on hand exceeds company’s market cap, with stock continuing to plunge lower and lower (it reached a record-low $1.05 on July 16, but had a run up today becuase of the story). While Napster hasn’t posted a profit in four years, its $69.8 million in cash and investments as of March 31 eclipsed the shares’ $52.1 million value before today, it notes. CEO Chris Gorog has built up cash by slashing sales and marketing expenses by 90 percent to $18 million in the fiscal year ending March, while revenues rose 15 percent to $127.5 million.

It also notes that New York-based hedge fund Eminence Capital boosted its stake to 9 percent in Q2. This comes as some dissident shareholders have recently launched an improbable proxy fight hoping to get themselves representation on the company’s board.

Among the buyers that it lists:
-- JDS Capital, the NYC hedge fund that owns eMusic.com. JDS bought 1 million shares of Napster in the first quarter, according to filings, but refused comment on any speculation.
-- RealNetworks (NSDQ: RNWK), which owns Rhapsody in a JV with MTV Networks...it has a hoard of cash lying around, but I doubt it will try and put the two brands together.
-- My bet is on someone like Comcast (NSDQ: CMCSA), which has been acquisitive of late, and can easily integrate the brand within its own broadband service and market it through its channels.

• Napster Activists: Company Worth At Least As Much As Last.Fm
• Napster Shareholder-Subscribers Launch Proxy Fight