Seeking Alpha

Pandora gets a lift from vague M&A rumors

  • Vague M&A speculation has led Pandora (P +3.2%) to move higher in early trading. Zero Hedge states (with trademark skepticism) Yahoo is the rumored would-be suitor.
  • With a current market cap of $5.3B - an acquisition would doubtlessly require a higher price - Pandora would be a big fish for all but a handful of tech giants to swallow. 11% of the float was shorted as of July 15.
  • Separately, Pandora has announced a partnership with Merlin, a rights agency representing 20K+ indie record labels and distributors. Pandora will "identify select tracks" from Merlin-backed labels and artists for additional exposure, and provide the labels/artists with data on user activity.
Comments (41)
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    THERE IS NO TAKEOVER. Another rumor of the week for Pandora. They do this every time this garbage stock dips below 25$.

     

    Most of the institutional investors bought this garbage over 25$, they spread these rumors to save their profits. Just a scam to keep SEC away.

     

    http://abt.cm/1pCf4Ac

     

    Acquirer would have to pay 80% more in rates on top of a ridiculous overvaluation of 5B+ market cap for a company that has losses over a decade. They would write down the entire acquisition in a year because it will never make any profits.

     

    Insiders keep selling huge amount of shares every week. Management selling stock is a good indicator that this takeover rumors are fake. http://1.usa.gov/MemquO
    6 Aug, 10:31 AM Reply Like
  • AngleSideSide
    , contributor
    Comments (172) | Send Message
     
    I'm usually not a conspiracy theorist about market manupulation -- but wow -- this should at least raise a few eyebrows at the SEC. That rumor and chart scream "PUMP AND DUMP".

     

    http://bit.ly/1cGqb2Z
    12 Aug, 04:46 PM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    Insiders also playing the game.

     

    Today Pandora director OTCHER PETER C sold 47,757 shares http://stks.co/t0f1e

     

    And on Monday, founder sold 50k shares.

     

    Criminal 101
    12 Aug, 05:47 PM Reply Like
  • Rex Kwon Do
    , contributor
    Comments (58) | Send Message
     
    Oh, I forgot that Pandora execs are the only execs who sell shares of their stock. Does that sound stupid to anyone else? Unlike other companies, Pandora execs must not not have large mortgages, expenses or kids in college... why would they need money? insiders sell stock all the time for every publicly traded company that exists... this is not breaking news nor does it prove a THING.
    6 Aug, 11:48 AM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    Because a mortgage costs a million bucks each week? /S lol

     

    CRO has been selling a million dollars worth of shares almost every week.

     

    Check it yourself.

     

    http://1.usa.gov/MemquO

     

    Poor Pandora execs who just rented an expensive decadent New York office while not making money over 10 years now. http://bit.ly/1qUxGiO

     

    HOW WILL THEY FEED THEIR KIDS?? LOL

     

    If someone knows its company going to get bought, they wouldn't be dumping all their option stock as soon as they get them. A little bit of thinking can take you a long way in understanding how greed works.
    6 Aug, 02:04 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    Decadent? That's what is expected to do business on Madison Ave. But hey, at least they drew the line at a "mist tunnel" (lol)
    http://pge.sx/1pCzskJ

     

    And I don't see insiders "dumping", in fact selling has slowed dramatically with the stock slide, that says insiders think shares are undervalued.
    6 Aug, 02:14 PM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    Not a single Pandora exec has bought its shares open market over 12 months now.

     

    18M SHARES have been sold by insiders past 12 months.
    3m were sold last 3 months.

     

    A WHOPPING 91 INSIDER SELLS PAST 12 MONTHS.
    15 SELL PAST 3 MONTHS.

     

    http://bit.ly/1hXcALL

     

    You were saying Dglulick? LOL

     

    Dot com bubble stocks are back. Fancy offices with internet companies with 0 profits, even worse losses.
    6 Aug, 02:20 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    This is typical for any tech start-up, its not like these guys had any money *before* they reinvented the future of music consumption! If 100% of your net worth was in one stock, (especially after toiling away for very little for a decade and suddenly had options worth millions) you'd diversify too, no matter how bullish you were on your company!
    6 Aug, 02:26 PM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    Tech start up? TECH START UP?

     

    LOL

     

    Company exists over a decade now which has IPO'ed and had a secondary offering with negative returns since inception. That's not a tech start up anymore. That's a charity organization or pyramid scheme.
    6 Aug, 02:31 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    You love pointing out how long P has been in business, but the truth is Pandora (knowingly or not) was ahead of its time waiting for mobile broadband to happen. Streaming is the future of music consumption, if not, why is everyone copying them? But no one has the scale to compete. Sure Apple, Google and Amazon will throw some money at it, but as Netflix survived a similar onslaught (and many shorts like you saying how they were doomed http://seekingalpha.co... read those great comments from dgulick, he called it, stock doubled the next month!), so will P.

     

    And now P is ahead of the curve again as the first connected cars have begun to roll off lots. Yes, tech startup, very much.
    6 Aug, 03:22 PM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    Again with the Netflix reference.

     

    NETFLIX IS --->ON DEMAND<---- [SUBSCRIPTION ONLY] BASED SERVICE WITH EXCLUSIVE CONTENT SPANNING MOVIES TO DOCUMENTARIES LAUNCHING RAPIDLY IN EVERY CONTINENT.

     

    PANDORA IS A JUKEBOX WITH FORCED MUSIC WITH ADS WITH NO NON-MUSIC CONTENT, NO EXCLUSIVE CONTENT AND LIMITED TO USA.

     

    Closest thing to Netflix in streaming music business is Spotify.\

     

    Just do a twitter search "Pandora Spotify".... tons of people switching to Spotify after discovery.
    6 Aug, 03:37 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    Again with your misconception about exclusive and on-demand content applied to radio. Pandora is to radio what Netflix is (was) to DVD rentals, the latter is "on-demand" (as it always has been) the former is not (as it *never* has been, nor has radio's content even been exclusive).

     

    After Netflix, Blockbuster went from $6B/yr in revenue to ZERO, how many years do you give debt laden Clear Channel?
    http://bloom.bg/1kJj4Ag
    "Clear Channel’s interest expenses have surpassed its operating income in every quarter since the end of 2008"

     

    $607M more in losses in 2013:
    http://1.usa.gov/1kJj6bu

     

    2014 is not going well. And now Clear Channel has to pay Spotify to generate playlists for iHeartRadio:
    http://cnet.co/1kJj6bw
    6 Aug, 09:11 PM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    Dgulick is like a religious fundamentalist, all other religions must die and only his is the true savior.

     

    Yes, Spotify will go bankrupt but not his precious Pandora which needed a secondary offering after IPO just to not go bankrupt. If you gave the choice to any random person on the street would pick Spotify over Pandorka in a heartbeat. Just check on Twitter.

     

    BTW.

     

    MORE COMPETITION! http://stks.co/a0rSt

     

    A new one pops in every week!
    6 Aug, 10:53 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    I said Clear Channel, but yes, without a successful IPO, Spotify is flirting with disaster too: http://bit.ly/1kJHeuv

     

    And your "competition" is a concert ticket sales app (lol).

     

    I'm sure you're reading all the news on the Pandora/Merlin deal, Merlin's 20,000 labels are in 39 countries, no doubt this was orchestrated to pursue new markets:

     

    Hear that? Pandora and artists finally reach sweet harmony
    http://cnet.co/1kJHfP6
    "by setting up direct deals ... Pandora has opened the door to international expansion"
    7 Aug, 12:06 AM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    Pandora is restricted in USA only and no one wants to listen to indie music from other countries.

     

    Even Pandora admitted a year ago people want to listen to the same songs over and over which was their excuse for a limited library.

     

    All of a sudden lots of unknown artists flooding your listening time not going to help adding active listeners.

     

    All its going to do is add more costs. Pandora is panic mode and trying to save its growth by making its a product a niche for newcomers. Unfortunately we already have something for that, its called SOUNDCLOUD, good luck fighting an established app.
    7 Aug, 08:25 AM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    "Pandora is restricted in USA"

     

    Only by the statutory rates that P favored (which included AUS/NZ already and Canada just announced favorable), direct deals (like the one with Merlin) would lift that restriction (a limited library at this point! but this is a start, and this move will definitely force the major labels hands, no doubt they are colluding as we speak! http://bit.ly/1pDq2Wf)

     

    "people want to listen to the same songs... excuse for limited library"
    Traditional radio plays only about 1000 artists, Pandora's library is over 120,000. While people like to listen to limited repertoire, they don't all like the *same* repertoire! Pandora serves a huge market that doesn't get their music played on traditional radio.

     

    And Soundcloud is great, but a bit player, and more of a self publishing site, think YouTube for music (YouTube back when it was all waterskiing dogs and whatnot, before they had professionally produced shows), whereas Pandora is more like Netflix. (ha, knew that would annoy you, but I mean in the sense that Netflix has the content people actually will pay to see).
    7 Aug, 11:27 AM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    How Pandora screws songwriters and musicians.

     

    http://t.co/DZaSB9dkIF

     

    "Cracker vocalist David Lowery claimed that he was paid $16.89 for a song that was played more than 1.15 million times on Pandora (NYSE: P)"

     

    Yep those Indie guys going to love Pandora! lol
    7 Aug, 03:17 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    (Is this news to you? Pretty old stuff.)

     

    What David Lowery omitted (amorally) is that he also received a much larger payout for the sound recording, Pandora paid $1370 total: http://bit.ly/1heINgk (I know you aren't going to read that, but what David is commenting on is the size of the green slice in the pie chart, takeaway from the article: "attacking Pandora with intentionally misleading statistics just undermines the credibility of the argument"). Is the split equitable? I can't say, as a percent of revenue, P pays songwriters more than FM and less than on-demand streamers, seems about right, but trying to look at this while ignoring the performer and record label pay is devious at best:
    http://bit.ly/V1Ffp4
    Lil Wayne – $3 million
    Drake – $3 million
    Coldplay – $1 million
    Adele – $1 million
    Wiz Khalifa – $1 million
    Jason Aldean – $1 million
    Rascal Flatts – $670 thousand
    Ellie Goulding – $609 thousand
    Zac Brown Band – $547 thousand
    Iron & Wine – $173 thousand
    French Montana – $138 thousand
    Bon Iver – $135 thousand

     

    (Btw, this is from 2012, P's annual payouts to performers/artists have increased by 80% since then, total royalty payments since P's inception now exceed $1B!). You can't have it both ways, saying P is hamstrung by their exorbitant content costs (as you have proposed in prior posts) *and* is unfairly compensating artists! Fact is, neither is true.

     

    The indies *are* going to love P, increased spins/royalties, free data for tour planning and direct access to their audience, all things the majors are *not* getting with the statutory rates! It is a bold play by P, we'll see how the majors react, will be interesting, especially considering the proverbial 800lb gorilla, i.e., the DOJ investigation into possible antitrust / collusion!
    7 Aug, 04:13 PM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    LOL you can't have antitrust on a structure thats VOLUNTARY lol

     

    So keep your lies to yourself.

     

    Only collusion I see is banks underwriting/owning the very stock they pumping, increasing their PTs while insiders sell and stock tanks even further.
    7 Aug, 04:50 PM Reply Like
  • Rex Kwon Do
    , contributor
    Comments (58) | Send Message
     
    manic is god, Dgulick. he is right about everything.
    7 Aug, 05:29 PM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    You'll lose less money once you accept your Deity. I require virgin child of a banker sacrificed every week.
    7 Aug, 05:34 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    "you can't have antitrust on a structure thats VOLUNTARY "

     

    Of course you can! ASCAP was created for the very purpose of being a monopoly! That's why the government has to set rates and implement consent decrees.

     

    Also, regarding Sony-UMPG collusion, it is apparent that Judge Cote thinks they're guilty (keep in mind she was the judge that found Apple guilty of eBook price fixing), this from her findings:

     

    "Pandora has shown that the Sony and UMPG licenses were the product of, at the very least, coordination between and among these major music publishers and ASCAP. Sony and UMPG justified their withdrawal of new media rights from ASCAP by promising to create higher benchmarks for a Pandora-ASCAP license and purposefully set out to do just that. They also interfered with the ASCAP-Pandora license negotiations at the end of 2012. UMPG pressured ASCAP to reject the Pandora license ASCAP's executives had negotiated, and Sony threatened to sue ASCAP if it entered into a license with Pandora. With only a few business days remaining in the year 2012, ASCAP refused to provide Pandora with the list of Sony works [needed by Pandora so that they could remove them if an agreement wasn't reached] without Sony's consent, which Sony refused to give. Without that list, Pandora's options were stark. It could shut down its service, infringe Sony's rights, or execute an agreement with Sony on Sony's terms. Then, despite executing a confidentiality agreement with Pandora, Sony made sure that UMPG learned of all of the critical terms of the Sony-Pandora license. And LoFrumento [ASCAP CEO] admitted at trial that ASCAP expected to learn the terms of any direct license that any music publisher negotiated with Pandora in much the same way..."

     

    "What is important is that ASCAP, Sony, and UMPG did not act as if they were competitors with each other in their negotiations with Pandora. Because their interests were aligned against Pandora, and they coordinated their activities with respect to Pandora, the very considerable market power that each of them holds individually was magnified."

     

    I don't know, what do you think? Coordinating in order to "magnify market power", "not acting as competitors", leaking confidential terms of licensing deals (ignoring NDAs), a "Compendium modification" that allows partial withdrawal for "new media" rights (a violation of AFJ2), while, of course, allowing the ability to immediately rejoin ASCAP. This does not look good for Sony and UMPG and I'm seeing articles speculating on the end for ASCAP. They are appealing the decision (read: fighting for dear life).
    7 Aug, 06:39 PM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    LOL he actually thinks people read his crap. Well whatever you said, you are wrong.
    7 Aug, 08:27 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    What is most intriguing is how critical of a bargaining chip the repertoire list is, during negotiations both Sony and UMPG refused to provide it. The reason it is so critical is that the licensees fear that their works would receive less play time on P, and therefore, less revenue (which would hit the labels more than publishers, but less revenue either way. And of course for Sony, Universal, Warner, and others, the label and publisher are simply different departments within the same company). But the news of the Merlin deal indicates that this is precisely what Pandora has chosen to do:

     

    http://bit.ly/1q1uxqW
    'That doesn't mean Pandora's Music Genome Project will be superseded by Merlin's input, says McAndrews. "No song is going to show up on Pandora that wouldn't have shown up anyway. It just might show up sooner and, if they like it, more frequently." '

     

    The labels and publishers are the old guard trying to find their place as technology has taken over the music industry. Heck, the streamers know the hits before they do, making picking artists, promoting and marketing (i.e., their jobs) less critical in the digital age. Reminds me of the scouts in Moneyball that used intuition to pick a team, subjective at best, eventually losing out to the data driven quant.
    http://bit.ly/1q1uz28
    8 Aug, 04:39 PM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    Pandora Lost 53% of Its Market Share in 6 Months http://stks.co/p0eTF

     

    Spotify started sending invite activation codes to Canadians.

     

    http://bit.ly/1kPMpcq
    8 Aug, 08:30 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    You liked that article so much you posted it twice? Dude, they took it down, unworthy even for The Street!
    9 Aug, 12:11 AM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    You can read from Google Cache website, most likely it was removed because some analysts probably didn't want to be referred to negative remarks on Pandora since its a scam stock. Everything in article is true.

     

    http://bit.ly/1vquGwr

     

    "Spotify now boasts 10 million paid subscribers and over 40 million active users. Several representatives of IHeart Radio confirmed to me the company has 50 million active listeners. This is not a typo. Assuming ITunes Radio, GooglePlay and Rhapsody have simply maintained their minor market share of 13%, this leaves Pandora with 35%-40% market share. This means that Pandora has lost 53% of its market share in six months."

     

    "So, if analysts are basing their numbers off of a 77% market share and the stock is trading at $25 and some change, what is the price at around 35% market share? $12-$13? If this trend continues over the next six months there is a chance the market share decreases to 20% by December of this year."
    9 Aug, 12:36 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    Merlin represents 20,000 labels, with this deal and Pandora's reach (over 76M active listeners streaming over 25B songs a month) they are going to undercut the majors (Sony, Universal, Warner).

     

    How? Music discovery has traditionally been A&R men at big labels finding artists, signing them, producing albums, and promoting them, mainly by using their powerful influence to boost FM airplay, all in an effort to sell albums. But all of this is moot in the streaming age as album sales have been in decline for the past decade, and now, even iTunes sales have peaked. But also FM airplay is declining too (since 2007, according to the RAB, average hours/wk have dropped from ~20 to ~14, a decline of -31%), and with it, FM's importance as a discovery platform.

     

    What Pandora can do (and already does) is test market new artists / songs (in particular Merlin's 3M tracks with favorable direct royalty deals) on say, a few thousand users in a few select markets. Within days/hours they have accumulated enough data (thumbs up/down or skip) and if the song got through that gate, push it to the millions (all automated, mind you) that have similar music tastes based on P's ENORMOUS TROVE OF DATA WHICH ONLY PANDORA HAS! The value of 40B thumbs (and growing at ~15B thumbs/yr) cannot be understated here, they have realtime feedback that FM and the major record labels can only dream of. And now Pandora is sharing it with Merlin.

     

    Expect a reaction from the majors.
    9 Aug, 01:40 PM Reply Like
  • Rex Kwon Do
    , contributor
    Comments (58) | Send Message
     
    "just check on twitter". so that's where you are getting your $8 P theories. it all makes sense now. and Dgulick is the one who is a fundamentalist? you are living in a cave my friend.
    15 Aug, 10:09 AM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    Cross Link (Pandora Insider) Capital dumped 1.5m shares on this manipulated pump. http://1.usa.gov/MemquO

     

    It seems the insiders are just as bearish as I am. Kinda hilarious that management with founder own less than 2% of the float. Which means they have no control of anything.

     

    I guess that's what Zuckerberg, Microsoft and Google should have done, to sell all their shares to Wall St and lose control of their founded companies.

     

    Or maybe it means those companies kept their shares because they care for the future. While Pandora excecs just care for their short term pockets.
    16 Aug, 02:04 AM Reply Like
  • june1234
    , contributor
    Comments (2585) | Send Message
     
    Was Carl tweeting again?
    6 Aug, 11:59 AM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    Of course! Yahoo! An alibaba holding company with no cash who going to buy another money losing business to add to its arsenal of dogs. Next week takeover rumor Campbell Soup!
    6 Aug, 12:05 PM Reply Like
  • tigerjohnni
    , contributor
    Comments (889) | Send Message
     
    Its a scam, Yahoo just partnered with Live nation to stream live concerts from venues all over the country, and they did'nt have to spend 5plus billion. Why in the heck would they want a money losing streaming jukebox!
    6 Aug, 12:19 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    P would be a big fish for Yahoo to swallow, but if anyone could pick them up for under $10B it would be a steal.

     

    But the news that is getting overshadowed by this is the Merlin deal is huge! Pandora can reduce royalty costs by pushing more indy music, meanwhile providing artists access to P's trove of usage data (for selecting cities or partners for concert tour, communication with fans, etc). Major labels have been resistant to similar deals but they be wrong, Pandora's data, a level of insight that has never before existed prior to now, will prove to be critical to the labels going forward.
    6 Aug, 01:12 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    Ha, even Rocco likes it:

     

    Pandora's Deal With Thousands of Indie Labels Changes the Game
    http://bit.ly/XEvgrt

     

    "Ultimately, as Pandora enters the arena of taste making it puts pressure on labels, label associations and individual artists who don't like Pandora to swallow their pride and do business with Pandora"
    6 Aug, 01:58 PM Reply Like
  • blake303
    , contributor
    Comments (74) | Send Message
     
    Rocco is an idiot. If he likes it, you should short it.
    6 Aug, 02:33 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    Lol, perhaps true, but he's too erratic to be a good reverse-barometer!
    6 Aug, 02:51 PM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    Notice Pandora not revealing the numbers on the deal, which means Pandora content costs going to increase on this deal so they hiding it to spin it as a positive because everyone and Pandora knows that Pandora has no weight in making rates favorable.

     

    I am also glad they launched this fake takeover rumor on top of this partnership overshadowing the deal, that will help create misdirection and encourage a fake head reversal. Short away friends, this garbage got no chance, no matter how many rumors they roulette the next few months before doom in October.
    6 Aug, 01:55 PM Reply Like
  • dgulick
    , contributor
    Comments (1505) | Send Message
     
    Of course they didn't release the numbers, and of course this direct deal is for a reduced rate since there is statutory rate that they don't need to negotiate (idiot).

     

    Also, you don't know Yahoo's intentions any more than I do.
    6 Aug, 02:04 PM Reply Like
  • manicdvln
    , contributor
    Comments (741) | Send Message
     
    You also believe in tooth fairy and mickey mouse? Cause that's what I understood in your comment.
    6 Aug, 02:10 PM Reply Like
  • Rex Kwon Do
    , contributor
    Comments (58) | Send Message
     
    i thought this was a site for mature conversation/debate, manicdvln. over the past few months reading your comments, that theory has been tested to the max. my two year old has more maturity than you do. have some respect for other people's opinions... even if your "reasoning" does not come up with the same outcome. it's not like your single digit price prediction has ever come close to being true ($7 was it?). like the boy who cried wolf, eventually no one will take you seriously. This might have already happened, actually. you have been wrong about this stock for too long... but I respect your opinion, so bring it on without this "mickey mouse", "tooth fairy" or "Pandorka" BS.
    9 Sep, 09:02 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|