Pandora Pop Is Gone Day After IPO | Hacker News Reader

Pandora Pop Is Gone Day After IPO

techcrunch.com

30 pointsdavidedicillo28 comments

This is a good thing

One of the lessons people seem to have forgotten from the first bubble is that the opening day "pop" is a manufactured scam by the ibanks so that their insider/selected clients can flip some shares for quick buck. You don't want a pop, a pop is bad.

An IPO'd stock actually trading at its priced value a day later is a sign that the banking advisers actually did their job right in pricing it.

Pandora is still massively overpriced at $16/share. I reckon a price at $2/share would still be a significant gamble: http://shortlogic.tumblr.com/post/6586713689/pandora-should-...

That post is skewed and narrow-minded. Pandora is in places most people don't realize, and has growth opportunities the poster is not taking into account.

Remember, there's a big difference between a lifestyle business and a startup. A startup knows how to grow and do so creatively. A lifestyle business has no such inclination, and those involved with such efforts tend to think about other businesses in a narrow manner.

Hahaha. That's your argument? "They're in many places and you wouldn't understand why they're so valuable if you have a <scoff> 'lifestyle' business".

How about dishing concrete examples of all these places they're in that's going to make them as astonishingly profitable as they need to be to justify a $2.5B valuation?

How about not assuming a company that just IPOed is at the end of its road but instead will continue innovating and finding new revenue streams? They did just raise $200MM after all.

I actually think Pandora is going to turn out to be a nice, profitable business. But the valuation they're getting in the market is not that of a "nice, profitable business". It's one of a MASSIVELY profitable business throwing off hundreds of millions in profits. So far they haven't thrown off anything.

I'd be more impressed if they could support themselves after 7 years and didn't need investments and an IPO to stay afloat.

Actually they've been previously profitable but keep putting money into expanding the business.

Hahaha. That's your argument?

Yes, my snarky friend, that's my argument. Given your years of experience running startups from conception to IPO/buyout, I'm sure you can understand.

BTW I don't scoff at all at lifestyle businesses, if you're lucky enough to pull one off. But they're a different beast, and expertise in one area does not automatically translate to expertise in another.

So to restate your argument, Pandora is a company capable of carrying out an undertaking of great advantage, but nobody knows what it is.

Does that sound fair?

It sounds distorted. Pandora is a huge brand name and is already in places you aren't aware of -- in part because you're probably not its target market.

I don't think it is too surprising. They are bleeding cash and will someday have seriously stiff competition from at least Google, Amazon and Apple.

I do hope they do well; I really enjoy Pandora. But it has been an uphill battle for them to get this far, mostly because content owners are regressive-minded. And the battle will only get a lot more difficult as competition arises in the near future.

Pandora isn't bleeding cash.

"Pandora is by far the leading Internet radio service, with 80 million registered users, but it has yet to earn a profit and nearly half of its revenues go toward paying royalties to be able to stream music, fees that are set to escalate over the next four years. It had losses of $328,000 in the nine months ending Oct. 31."

From an article dating Feb 14th, this year:

http://www.variety.com/article/VR1118032185?refCatId=1009

And from the Reuters story from yesterday:

"Chief Executive Joseph Kennedy said there was no timeline to turn a profit, though a larger audience should eventually attract advertising dollars."

If you consider losing $328,000 in nine months while posting $90M in revenue to be "bleeding cash", I suppose you're right.

They're profitable?

http://news.cnet.com/8301-31001_3-10433355-261.html

Looks like they recently turned their first quarterly profit.

I love Pandora. It's the app that's being run the most on all my machines (laptop/desktop/android). In my eyes it's completely overpowered things like satellite radio.

Google Music is nice, too, but only if you have a large existing library of music, and in my recent experience it's been very slow to jump from one song to the other.

I used to listen to Pandora for ~50 hours a month, but since they added in comedy show clips, my usage has jumped up quite dramatically. I absolutely love it.

That doesn't seem right at all. From Reuters yesterday,

"Chief Executive Joseph Kennedy said there was no timeline to turn a profit, though a larger audience should eventually attract advertising dollars."

http://www.reuters.com/article/2011/06/15/pandora-idUSN15283...

The royalty rate that Pandora pays will increase 10% a year until 2015, which is when their current agreement expires. So, essentially, they have to be 10% better at extracting value out of each song played over the next 3.5 years. All bets are off come 2015.

http://techcrunch.com/2010/06/16/tc-teardown-pandora-the-tou...

I don't think this is correct at all actually: http://www1.realclearmarkets.com/news/reuters/finance_busine...

And their stock price reflects it

No pop does not = bad IPO. Pandora raised more capital than intended as the final IPO price of $16/share was about double that of the initial target IPO price range of $7 to $9. The lack of stock price volatility in the market is often a good thing as it allows the company a clearer picture of its capital base.

Pandora didn't get any of that "pop" capital. It went to investors who were able to sell on the first day.

Pandora replaces radio, and their music genome is pretty amazing and extremely hard to reproduce technology.

Look at related stocks like Clear Channel, Sirrius/XM, etc.. http://www.google.com/finance/related?q=PINK:CCMO

From the title, I thought the shareholders had demanded they stop playing pop music...

(That was not a joke. At least to me, "pop" in connection to a music company does not make me think of stock prices.)

these lackluster IPOs can truly be put on the backs of their financial partners

timing matters. the investment banks are taking companies public in a new downturn in the markets that could last a while. they should have gone public a year ago, when markets still had plenty of easy upwards momentum

what happened to pandora? greece. sorry, macro still matters. people get scared by big stories, they put their money in treasuries

I find if I run Pandora in a browser that has e.g. AdBlockPlus on it, I don't get ads. Given that, how can they possiby be making any money on me?

I get ads in the audio stream on my phone.

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