Mon, Oct. 17, 1:25 PM
- Pandora Media (NYSE:P) is down 3% as Bank of America downgrades the shares on a dim outlook for the company's achieving its five-year targets -- and what looks like too little, too late, on an on-demand subscription product.
- Analyst Nat Schindler lowered the firm's rating to Underperform from Neutral, and cut its price target to $9, from $14 -- implying nearly 28% more downside in shares from today.
- The share price is being supported more by acquisition speculation than by fundamentals, he says. The company will be hard pressed to double its revenues in five years (to hit $4B in 2020) and getting paying subscribers will be tough as competition has heightened: “Even with Pandora differentiating on auto playlist creation, we think it will be hard for Pandora to attract 10-15M paying subs, especially because switching users off other services that have invested time in building out their personal playlists will be extremely difficult,” he says, pointing to Spotify as well as Apple, Google, Amazon and Tidal.
- Meanwhile, Credit Suisse has lowered its price target on shares to $14, from $16. And Pacific Crest reiterated an Underweight rating.
Tue, Oct. 4, 1:27 PM
- Pandora Media (NYSE:P) is up 3.9% following an add to Goldman Sachs' Conviction Buy list based on high upside offsetting some risks.
- Analyst Heath Terry boosted his price target on shares to $19, implying just over 19% upside from today's higher price.
- Seeing "potential new revenues" and fully reflecting additional costs, he boosted Pandora's revenue estimates by 11% for 2017 and by 31% for 2018, and raised EBITDA estimates for 2018 by 115%.
- There's significant risks as the company launches new subscription models and transitions ad-supported business to direct label relationships, he notes. But “With premium radio, on demand, ad supported listening, ticketing, and growth in auto and home listening, we see multiple avenues" for it to achieve guidance (revenues of $4B by 2020, at a five-year compound annual growth rate of 28%).
Wed, Sep. 28, 4:47 PM
- With competition heating up with Apple for the future of digital music, Spotify (Private:MUSIC) is in advanced talks to purchase SoundCloud, reports the FT.
- SoundCloud's investors include Twitter (NYSE:TWTR).
- Spotify has 100M users globally, and this month hit 40M paying subscribers. Apple Music has 17M subscribers, and SoundCloud recently launched its own paid service.
- Interested parties include Pandora (NYSE:P).
Mon, Sep. 26, 11:27 AM
- Pandora Media (P -1.4%) has named LinkedIn's Nick Bartle its new chief marketing officer.
- Bartle has been VP of Member Marketing and Communications for LinkedIn over the past year, and had previously spent more than four years at Apple as senior director of marketing communications.
- He also had senior roles previously at BBDO and Goodby Silverstein & Partners working on digital, print and TV campaigns.
- The move is effective next Monday.
Thu, Sep. 15, 5:13 PM
- Pandora Media (NYSE:P) has just announced a direct licensing agreement with Warner Music Group, clearing the way for a $5/month subscription service.
- The company announced "Pandora Plus" this morning but didn't have all rights in hand -- likely giving up some leverage in the Warner deal.
- Earlier this week, the company reached direct deals with Merlin Network, Sony Music and Universal Music Group, keys to launching its revamped ad-free service.
- After hours: P +0.7%.
Thu, Sep. 15, 8:21 AM
- Pandora (NYSE:P) has launched Pandora Plus, a rebranded version of its $5-a-month Pandora One offering. It also has enhanced its free, ad-supported service.
- The release marks the beginning of a new era for Pandora, as the company will end 2016 with three tiers of service and an on-demand offering to compete with Spotify and Apple Music.
- P +1.6% premarket
Tue, Sep. 13, 1:04 PM
- Direct deals between Pandora Media (P -1.8%) and music labels -- Merlin Network, Sony Music (SNE -1.6%) and Universal Music Group (OTCPK:VIVHY -2.1%) -- should bring "enhanced subscription services" to market, the company says, an opportunity that the stock's cheerleaders have been waiting for.
- The company's headed for a $5/month radio-based product in the near term and a $10 on-demand product by year-end, says J.P. Morgan's Doug Anmuth, who reiterated an Overweight rating. "Though mgmt. didn’t comment on specific features, it indicated that the mid-tier product will have options users have requested, which we believe could include the ability to listen offline, skip tracks, & pick a limited number of songs directly," he writes. "P expects contribution margins to be in the 30-35% range (consistent w/industry economics), & that it will have multiple subscription tiers."
- The direct label deals preserve the economics of the core ad tier, says Piper Jaffray, which also reiterated its Overweight rating. The transition should "impact contribution margins near-term," but Piper expects the new functionality to "reinvigorate subscriber growth and help offset increased royalty costs," pointing to a "sizable" sub growth opportunity ahead.
- Previously: Pandora +4.2% as SunTrust's Peck upgrades to Buy (Sep. 12 2016)
Mon, Sep. 12, 9:30 AM
- Pandora Media (NYSE:P) is up 4.2% premarket as SunTrust Robinson Humphrey analyst Bob Peck upgrades shares to Buy, looking at beatable expectations, new product potential and even M&A.
- He's boosted his price target to $18 from $12, implying 32% upside in shares.
- The prospect of direct deals with music labels is a near-term catalyst, Peck argues, which could help the streamer "recapture a portion of current churn" and add some 4M subs a year (with a boost to revenues of about 15%, and to profits of 4-9%).
- Meanwhile, the rating bump isn't based on a possible acquisition, but Peck notes a large activist shareholder has pushed for such a deal, and reports of a previous Liberty Media offer at $15/share have already set a floor there, he notes.
- Previously: Amazon, Pandora to launch new music streaming services (Sep. 12 2016)
Mon, Sep. 12, 1:59 AM
- Music streamers may get several new service choices in the coming months, sources told the NYT.
- Pandora (NYSE:P) could announce plans this week to expand its $5/month platform, and is expected to launch a $10/month on-demand service by Christmas, which would compete with Spotify (Private:MUSIC) and Apple Music (NASDAQ:AAPL).
- Amazon (NASDAQ:AMZN) is also expected to reveal a platform with a large catalog of music for $10/month, or about half that amount for Echo customers.
Fri, Aug. 19, 6:28 AM
- Pandora Media (NYSE:P) is aiming to start expanding its internet-radio service as soon as next month, offering its hallmark free tier as well as two new monthly subscription options that will mark its foray into on-demand music streaming, WSJ reports.
- While the agreements haven’t been finalized, Pandora is close to inking deals with major record companies that will allow it to do so both in the U.S. and in new overseas markets.
Fri, Aug. 5, 3:24 PM
- On the company's earnings call, Liberty Media (NASDAQ:LMCA) CEO Greg Maffei said that if the company went for streaming music, a purchase would be organized in the company's Sirius XM (SIRI -0.1%) rather than at the parent level, where some other music businesses are housed.
- Shares in Pandora (P -1.7%) had risen two weeks ago on reports that Maffei had previously floated the idea of buying the Internet radio company for $15/share. Pandora shares are up more than 10% since that report, to $13.59 today.
- "I don't know how I could have been more negative on streaming services," Maffei said in the Q&A. But: "I think it's highly unlikely that anything would happen at the Liberty level. Sirius is our play for the online play for music, whether it's distributed through satellite or, as Sirius already does, through the online system."
- Several big players are entering subscription streaming, "likely to further commoditize the market," he notes. "Spotify (Private:MUSIC) did something, like, for the last year, $3.54 of ARPU per month and had 82% or 84% content costs. That sounds like a very hard business to me. And that is with Apple, Amazon, Google entering more deeply and more strongly."
- Liberty Sirius XM Group (NASDAQ:LSXMA) is up 0.2% today.
Thu, Aug. 4, 12:39 PM
- U.S. regulators are taking no new action on songwriter royalties, denying a bid by Sony/ATV (SNE +0.9%) and Universal Music publishing (OTCPK:VIVHY -0.1%) to rework decades-old deals governing payments.
- The antitrust division of the Justice Dept. spent two years investigating the issue after music publishers argued existing deals with songwriter groups (Ascap and BMI) needed to be revised for a digital/streaming era.
- But regulators said the existing terms benefit listeners while ensuring songwriters are compensated; the system "has well served music creators and music users for decades and should remain intact."
- Publishers had argued for the right to "partially withdraw" from Ascap and BMI and negotiate one-off licenses directly with services like Pandora (P +1.3%) or Spotify (Private:MUSIC) -- a move that Pandora opposed.
- Songwriters wanted better terms as well: BMI says it will challenge the new decision in court, while Ascap will seek legislative solutions.
Thu, Jul. 28, 7:35 PM
- Corvex Management -- the activists pressing Pandora Media (NYSE:P) to hire bankers and examine a sale -- has petitioned the FCC to take its stake from 9.9% up to 14.99% in the future.
- Pandora is up 2.1% after hours, to $13.45.
- The company has hired Centerview Partners to advise it on strategic options, though it still has a relationship with Morgan Stanley, which it engaged with for that purpose early in 2016.
- Corvex said in May that it had been talking with Pandora for several months in discussions that included exploring a sale.
- Previously: Pandora +5.9% in last few minutes on chatter of hiring bankers (Jul. 25 2016)
- Previously: WSJ: Liberty floated $15/share offer for Pandora to combine with Sirius XM (Jul. 21 2016)
Mon, Jul. 25, 7:12 PM
- Pandora Media (P +5.9%) has added on to its last-minute spike today, +0.8% after hours, amid reports that it hired Centerview Partners to explore strategic options under pressure from activists at Corvex Management.
- That means Centerview could end up running a sales process for the company, but it wouldn't be the first time that possibility has been raised.
- In May, Corvex had sent a letter pressing Pandora to “engage an independent investment bank with a fresh perspective and without any prior history of advising the company to advise on a value maximization process."
- In February, Pandora had hired Morgan Stanley -- which had advised Pandora on its 2011 IPO -- to explore a sale, Bloomberg notes.
- Sales chatter is not uncommon around Pandora, but had sprung up anew on news that Liberty Media floated a $15/share offer to buy the company and combine it with Sirius XM in recent months.
- P is quoting at $13.10 after hours.
Mon, Jul. 25, 4:02 PM
- Pandora Media (NYSE:P) spiked in the last two minutes of trading, up 5.9%, on a new report that the company has tapped Centerview to advise on strategic options.
- The company was on the move again last week alongside the revelation that Liberty Media had come to Pandora with a $15/share offer to buy the company, which it rebuffed.
- The new move puts shares at $13.
Fri, Jul. 22, 2:46 PM
- Pandora Media (NYSE:P) has rebounded and then some from a postmarket decline yesterday, up 3.8% now as analysts and others took a deeper look at underlying strengths
- Shares had slipped up to 9% after hours yesterday as the company posted a miss on revenues and saw active listeners fall 1.6%.
- Today Morgan Stanley reiterated its Overweight rating and $15 price target (implying 21% upside), as analyst Benjamin Swinburne focused more on listener hours (which grew 7% to 5.66B) than the decline in listeners -- two changes that brought the company to a record 24 hours per listener per month.
- "We believe the majority of this engagement growth is coming from product improvements," Swinburne writes, "including the success of Thumbprint radio, its new ad serving technology Chronos, and growing distribution in cars and key in-home consumer electronics.”
- Axiom and Albert Fried also each reiterated Buy ratings, each with a $16 price target. On the other hand, Pacific Crest downgraded to Underweight and set a 12-month fair value of $6: "Pandora's core operating leverage has deteriorated, and we see little prospect for meaningful profits in on-demand," says the firm's Andy Hargreaves. "While M&A is possible, we do not view it as likely at the current valuation. We do not recommend owning Pandora."
- Previously: WSJ: Liberty floated $15/share offer for Pandora to combine with Sirius XM (Jul. 21 2016)