• ABOUT
    • Contact
    • The Team
    • FAQ
    • Use & Privacy Policy
  • ADVERTISE
  • ROWFAX
  • JOB LISTINGS
MusicRow.com
  • CALENDARS
    • Album/EP Releases
    • Single/Track Releases
    • Industry Events
  • OBITS
  • CHARTS
    • Radio Chart (Current)
    • Radio Chart (Archives)
    • No. 1 Challenge Coin
    • Songwriter Chart (Current)
    • Songwriter Chart (Archives)
  • REVIEWS
  • MY STORY
  • NEWSLETTER
    • Newsletter (Current)
    • Newsletter (Archives)
    • SIGN UP (FREE!)
  • SUBSCRIBE
  • STORE
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu

Pandora Drop Sends Mixed Signals

June 17, 2011/by admin

Pandora Media went public this week on June 15, with an offering priced at $16 per share. The stock opened at $20 a share, hitting a high of $26 and closing at $17.42. On Tuesday, before shares went onto the open market the company was valued at $2.6 billion. At one point on Wednesday the value had climbed to $4 billion. But by the end of the day on Thursday, the stock had dropped 24% and once again was worth about $2.1 billion. As of this writing mid-day June 17, the stock is down about 3% at $12.85 per share for a market cap of about $1.96 billion. So what happened to the wings on which Pandora was soaring?
A large part of the problem can be traced to BTIG Research analyst Richard Greenfield who came out shortly after the IPO with a sell rating and a price target of $5.50. [ouch]
Greenfield pointed to a new scenario with more competition for the web radio service from companies such as Spotify and Turntable.fm.

“While Pandora is creating a large active user base, its reach/frequency continues to pale in comparison to terrestrial radio, as does its profitability,” says Greenfiled. “Pandora’s fundamental problem is that active users and listening hours are growing rapidly, but those listener hours have fixed (and annually escalating) royalty costs per streaming hour (fees to music labels).”

Another way to explain the above comment is to say that the business doesn’t scale.
In an interview posted on AllThingsD, writer Peter Kafka asks Pandora CEO Joe Kennedy about the effect of Internet and Pandora coming to auto dashboards. Kennedy says, “We’ve had announcements from six of the world’s major automakers — Ford, Toyota, GM, Mercedes, BMW and Hyundai — and they’ve all said, ‘we’re going to integrate Pandora into our vehicles going forward.’ Now, the nature of automotive is, it isn’t a flip-the-switch phenomena. It rolls out over several models, over time. And then you have a replacement cycle that’s about 7 years per car. So I think of automotive as a snowball, that starts out relatively small, but builds and builds and builds and builds. You get out to years five to ten, and it’s tremendously big.”
 

  • Author
  • Recent Posts
admin
admin
admin
Latest posts by admin (see all)
  • Crested Butte Songwriters Festival Debuts - November 28, 2011
  • Scott Borchetta On CNBC Power Lunch - November 22, 2011
  • Twitter Used To Rank Republican Candidates - November 21, 2011
Share this entry
  • Share on Facebook
  • Share on X
  • Share on LinkedIn
  • Share by Mail
https://musicrow.com/wp-content/uploads/2019/03/MusicRow-header-logo-Mar19B.png 0 0 admin https://musicrow.com/wp-content/uploads/2019/03/MusicRow-header-logo-Mar19B.png admin2011-06-17 12:57:352011-06-17 12:57:35Pandora Drop Sends Mixed Signals

RECENT NEWS

  • Texas Songwriter U Program Now Accepting Submissions July 1, 2025
  • AD/HD Inks With The Neal Agency July 1, 2025
  • Apple Music Honors Toby Keith With Exclusive Apple Music Nashville Sessions July 1, 2025
  • Noeline Hofmann Inks With Sony Music Publishing July 1, 2025
  • Eric Church To Livestream Trilogy Of Red Rocks Shows Exclusively On Nugs July 1, 2025
  • Rusty Gaston Joins CMHOFM Board Of Officers & Trustees July 1, 2025
  • No Ka ‘Oi Songwriters Festival Unveils 2025 Lineup July 1, 2025
  • Otto Padrón Named Co-President & COO Of Get After It Media July 1, 2025
  • Mark Your Calendar—July 2025 July 1, 2025
  • Jason Aldean Extends ‘Full Throttle Tour’ Into Australia & NZ In 2026 July 1, 2025

Like Us on Facebook

Follow Us on Twitter

Tweets by MusicRow
© 2025 Music Row Enterprises, LLC - Enfold WordPress Theme by Kriesi
Website hosted by Nashville web design company, All My Web Needs.
  • Link to Facebook
  • Link to X
  • Link to Instagram
Scroll to top