Apple Computer is in discussions to buy Universal Music, the world's biggest record company, according to media reports.
Apple has faith in online music
The computer maker is believed to be willing to pay $5bn-6bn for Universal, which has been put up for sale by its cash-strapped parent company, Vivendi.
Vivendi wishes to raise about $7bn by selling some or all of its entertainment assets, which also include television and film studios and theme parks.
Neither company would comment on the report, but analysts told BBC News Online that such a deal would make little sense for Apple.
"It wouldn't change our recommendation on Apple stock," said one analyst.
"But since we were already recommending clients to sell, things couldn't get much worse."
Apple's shares closed down $1.17, more than 8%, at $13.20.
The rationale behind the reported tie-up is Apple's considerable interest in online music.
The firm's iPod music player has been a hit, and its computers are designed with multimedia capabilities such as music and movies as a top priority.
Apple has also been testing services to make distributing music via the internet easier and less controversial.
Some technology analysts have long argued that computer makers need to sign deals with content providers, as a way of differentiating their products at a time of increasing competition and falling prices.
But going to the lengths of purchasing a record company, rather than simply signing a content deal of some sort, is seen as an unlikely step for Apple.
In the dark
The reports have sown further confusion in what was already a murky sell-off process for Universal.
Vivendi refuses to speak about the progress of talks, and is unwilling to speculate even in the most general terms about what it wants to achieve.
It is still far from clear, for example, whether the music business will be sold separately from other Universal assets.
Various companies have reportedly sniffed around, but the only offer so far has come from oilman-turned-investor Marvin Davis, who has bid $13bn for 85% of the whole entertainment business.
According to press reports last year, Vivendi turned down an offer from Mr Davis in November.
The price tags currently under discussion may well be too small for Vivendi's expectations: Universal Music alone enjoys $6bn in annual revenues.