Pandora Media Inc (P)’s Stock Is Soaring As It Looks For A Buyer?

0
Pandora Media Inc (P)’s Stock Is Soaring As It Looks For A Buyer?

Shares in Pandora Media took off this afternoon within minutes of a report in the New York Times suggesting that the world’s largest Internet radio provider is looking for a buyer.

Pandora is up nearly 9%

Following a piece in The New York Time’s Dealb%k penned by Leslie Picker and Ben Sisario this afternoon, shares in Pandora have spiked dramatically.

Worm Capital January 2020 Performance Update

Worm Capital Jan 2020Worm Capital performance update for the month ended January 2020. Q4 2020 hedge fund letters, conferences and more Dear Investors, Please see below for the net performance of our strategies through January 2021. If you'd like to learn more about our firm's long-term investment philosophy and our focus on disruptive technologies, we were recently invited Read More


The two reported wrote that according to sources briefed on the talks, Pandora is considered selling itself and is working with Morgan Stanley to help find it potential buyers. While this afternoon’s piece quotes anonymous sources close to the deal, those same sources said the talks are still in a preliminary stage and may go no further.

While the company  does have the largest amount of streaming customers, it also has a healthy amount of competition including Apple Music, Spotify and a host of others. As a result, the company’s stock has a market value of $1.8 billion compared to $7 billion to years ago. More importantly, certainly for investors, is that the stock has dropped over 60% in just the last five months.

Pandora is primed to announce both its fourth-quarter and full-year earnings at the end of market close today and anything less than rosy might see this afternoon’s gains evaporated quite quickly. At the end of 2014, Pandora announced that it had 81.5 million users, the number that was also its peak. In the last quarter of this year (2015), the service could claim only 78.1 million users.

The company is calling for its adjusted full-year earnings to run between $51 million and $56 million for the  compared to its third quarter guidance which called for earnings between $75 and $85 million.

Consensus analyst estimates (S&P) are calling for $1.2 billion in revenue for 2015 which would be a 27% percent gain from 2014. Unfortunately for Pandora that would mark its all-time slowest growth numbers.

Fewer users, higher royalties

A panel of federal judges recently increased the amount of money that the radio provider and other Internet radio providers would have to pay to record companies. While this might sound bad, investors were pleased as the increase was considerably less than what Pandora was expecting to have to shell out in royalties.

Neither Pandora or Morgan Stanley have commented on the story but it brought an immediate rise in Pandora shares. Pandora closed Wednesday at $8.40 but opened today at $8.10 ahead of today’s earnings call. However, the stock has climbed to $8.99 (2:50 EST) for a gain of 7.02%.

That gain came at the same time as the NYT ran its story. At one point following the news the stock had reached $9.68.

Previous article 5 Undervalued Companies For The Defensive Investor Near 52 Week Lows – February 2016
Next article Whip Deflation Now
While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. <i>To contact Brendan or give him an exclusive, please contact him at [email protected]</i>

No posts to display