Qtrax Questions Get Louder, Stink Starts Spreading

Qtrax now finds itself at the center of a high-profile embarrassment, and a seriously expensive misunderstanding.

But how could Qtrax commit such a glaring mistake?

In Cannes this week, Qtrax plastered its coming-out and featured big-name artists like James Blunt and Don Henley.  “You can’t walk anywhere without seeing Qtrax,” said one executive, commenting from Midem.  “This probably cost one million [dollars], maybe 1.5 million with Henley.”

Majors didn’t play along, though negotiations are reportedly underway.  Qtrax pointed to imminent signatures, yet dragged-out discussions seem likely.  Major labels declined to offer timetables, and at least one label appears closer to the start of its negotiation process, according to one executive close to the situation.

If the whole thing sounds unbelievable, perhaps it is.  Major misunderstandings aside, executives are now considering the possibility of stock manipulation, or at least the issuance of seriously misleading statements.

Qtrax is owned by Brilliant Technologies (BBLN.PK), a penny stock that enjoyed a big surge on Friday – and a major sell-off on Monday.  At the bell, shares had fallen 43 percent to 0.0525, a cliff prompted by the non-deals.  “There is a lot of concern that something is going on that nobody really understands,” said one source, pointing to the possibility of a manipulated stock run-up.