Last Call: RealNetworks rises with gaming spin-off plan

Shares of RealNetworks, which operates the Rhapsody online music service and provides the RealPlayer media player, rose 81 cents, or 12.5 percent, to $7.29. In the past year, the stock has traded between $5.07 and $8.68.

Late Thursday, RealNetworks said it intends to spin off its casual gaming business into a separate company and distribute the shares to RealNetworks stockholders. RealNetworks said it may hold an initial public offering and sale of some of the unit's stock before spinning it off.

Also Thursday, RealNetworks reported first-quarter revenue above analysts' estimates and predicted second-quarter revenue above analysts' estimates.

Kaufman Bros. analyst Barbara Coffey raised her price target for the stock to $9 from $8 in a client note and kept her "Buy" rating, calling the first-quarter results "very strong" and saying they were overshadowed by the gaming spinoff.

"Overall, we view the (spinoff) as a positive one for shareholders as we feel that while RealNetworks has many solid business segments, to a large degree the quality of these assets are undervalued by investors," she said.