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Apr. 10, 2015, 8:06 PM
- With news that Spotify is close to a new funding round of $400M, Pandora Media (NYSE:P) rose 5.3% after hours on what investors are taking as positive valuation news.
- If completed as reported, Spotify's round values the company at $8.4B, more than twice the market cap of Pandora ($3.5B).
- How do the companies compare beyond that? Spotify earned more revenue in 2014 ($1.3B, vs. Pandora's $920.8M).
- Pandora said at year's end it had 81.5M active listeners. Around the same time, Spotify said it had about 45M free users and 15M paid subscribers ($9.99/month for no ads).
- Any valuation data points may be helpful for Pandora, as many analysts consider upcoming royalty-rate rulings a risky overhang for the stock.
- Previously: SunTrust weighs in on Pandora's rights fights (Apr. 09 2015)
- Previously: Axiom launches Pandora Media at Hold, citing heavy song-rate risk (Apr. 06 2015)
- Previously: Pandora up 3.4% as Miller notes 'monstrous discount' (Mar. 27 2015)
- Previously: Pandora up 2.9% as CRT Capital upgrades to Buy (Mar. 18 2015)
Apr. 10, 2015, 5:27 PM
- Spotify's close to a deal on a seventh funding round, which would raise $400M and value the service at $8.4B, The Wall Street Journal reports -- launching it into rarefied air. There's still no timeline for an IPO.
- An $8B valuation means investors place it at more than twice the worth of key competition Pandora Media (NYSE:P). Spotify was valued at $4B-$5B last summer and fall.
- Like Pandora, Spotify is losing money and needs cash to support heavy royalty payments. Spotify's minority ownership of record companies -- including Universal Music Group (OTCPK:VIVHY), Sony Music Entertainment (NYSE:SNE) and Warner Music Group -- have pressed for higher conversion of free users to paying subscribers.
- Along with Pandora, Spotify faces intensifying competition with likely new entries from Apple and Google, along with Jay-Z's high-bitrate service Tidal.
- Manhattan Ventures Partners places Spotify's 2014 revenue at $1.3B, vs. Pandora's $920.8M.
Apr. 9, 2015, 12:03 PM
- SunTrust analysts say it's "extremely premature" to draw conclusions about headlines that "appear negative" for Pandora Media (P -1.7%), as the Justice Department discusses the details around music performance rights.
- At issue is music publishers trying to pull works from performance-rights organizations like ASCAP and BMI, in order to get a higher-than-statutory rate directly from Pandora.
- A pair of judges' rulings have left the issues largely unresolved, Bob Peck and Matthew Thornton write. One factor is whether publishers can license works to some providers at the statutory rate and negotiate a different rate directly.
- The analysts say further discussion could benefit from more transparency from the PROs and labels over ownership, as well as more notice over withdrawing from PROs.
- SunTrust rates Pandora stock as a Buy.
Apr. 6, 2015, 3:57 PM
- Pandora Media (P +0.3%) rebounded from a soft open to move into positive ground today, while Axiom Capital launched coverage of the company at Hold.
- Axiom's Victor Anthony set a $17 price target. Shares are trading at $16.26.
- Anthony pointed to risks from competition as well as the continuing overhang of the Copyright Review Board rate decision, which will set costs per play and might have a wide range of impacts to Pandora's costs: "We currently model the per-song fee to increase to $0.0015, in 2016, from $0.0014 in 2015, +7% YoY."
- Those pieces of pennies add up: Anthony points to "meaningful risk" owning the stock into the CRB decision, noting the extreme variance between Pandora's proposal vs. the SoundExchange proposal on behalf of publishers, labels and artists.
- Pandora's offering of a $0.0004 decrease would boost its non-GAAP 2016 EPS by 126%, to $0.99, while the "rather draconian" proposal from SoundExchange of a wholesale $0.0011 increase would knock Pandora's 2016 EPS to -$0.69, a difference of -257%.
Mar. 27, 2015, 2:25 PM
- Pandora Media (NYSE:P) -- down 1.5% during lunch hour -- jumped back into positive ground, now up 3.4%, as LMM's bullish Bill Miller tells CNBC the stock trades at a "monstrous discount to what it would be valued at if it were privately held."
- While Spotify is recently valued around $10B, he points to Pandora as a profitable company with a $3.3B market cap and expects the company to grow earnings at 100% annually over the next three years.
- "It has 88M listeners, and it streams more music than YouTube does video," Miller says.
- He notes Pandora sold down as user growth slowed but "that picked up again in the quarter." They're probably going to lose some market share to possible competition from Spotify and Apple, but he believes Pandora's lead is sustainable.
Mar. 18, 2015, 9:57 AM
- Pandora Media (NYSE:P) is up 2.9% as CRT Capital upgrades the shares to Buy from Fair Value, on expectations that royalty rate talk would end up favorable for the streaming music firm.
- Pandora paid a record $439M to rights owners last year. In dealing with the Copyright Royalty Board, the company reports that it pays $10,000 or more a year to 2,000 artists, and $50,000/year or more to more than 800 artists.
- The analysts raised Pandora's price target to $22, from $16. Shares are currently trading at $16.18.
Mar. 16, 2015, 3:18 PM
- Pandora (P -4.7%) has returned to earth after Friday's gossip-fueled 7.3% gain.
- Unsourced rumors that someone (again) was going to come buy the company went nowhere (so far ...): Jay-Z, who was subject to chatter about swooping in with a Pandora buy, had his bid for Sweden's Aspiro (parent of high-quality streaming services Tidal and WiMP) accepted late last week, though hope may have sprung eternal for those counting on a buyout.
- Updated 7:18 p.m.: Pandora closed today -5.3%, and is down another 0.1% after hours.
- Previously: Dougherty analyst: Pandora takeover rumor 'doesn't make any sense' (Mar. 13 2015)
- Previously: Pandora cruising, +8.9% on takeover chatter (Mar. 13 2015)
Mar. 13, 2015, 1:02 PM
- Pandora Media (NYSE:P) has had a memorable morning (up 8.1% on about double average daily volume) on what has become periodic takeover rumor, but Dougherty analyst Steven Frankel says don't count on music impresario Jay-Z coming in to buy.
- That rumor "doesn't make any sense to me," Frankel tells Benzinga, noting that Jay-Z invested in subscription streamer Tidal.
- With key royalty negotiations going on, Frankel doesn't think Pandora will look for a sale.
- Pandora's at its highest point since tumbling Feb. 5 after earnings.
Mar. 13, 2015, 11:15 AM| Mar. 13, 2015, 11:15 AM | 18 Comments
Mar. 6, 2015, 1:40 PM
- Analysts are praising strategies Pandora Media (NYSE:P) laid out at investor day, though a few key updates were missing, even as competition intensifies from the likes of Apple and Spotify.
- Pandora might look at an on-demand product a la Spotify -- raising the "interesting" possibility of making Pandora a "one-stop shop for users' acoustic demands," says RBC's Mark Mahaney.
- A key Copyright Royalty Board ruling won't come until December, but it will dictate what Pandora will pay for about 90% of the content it provides subscribers. The company had no updates on progress there, though the decision is a ways off.
- "We believe the CRB outcome will be positive," says Pacific Crest's Andy Hargreaves, "but a (stock) overhang is likely to persist. We believe the most likely outcome from the CRB rate proceeding is status quo pricing or lower."
- On competition: "Among U.S. ad-supported digital properties, Pandora trails only Facebook in total engagement and the company's algorithms have demonstrated a consistent ability to defend the business against competitors."
- Pacific Crest had an Outperform rating on Pandora with a price target of $45. RBC Capital has a Buy and on Monday set its price target at $25.
- Shares are -0.4% today to $15.35; they've lost 58.8% over the past 12 months.
- Related: Another Competitor For Pandora To Deal With (Mar. 03 2015)
- Related: Pandora Can Survive Apple, But Does That Make It A Good Investment? (Feb. 12 2015)
Feb. 25, 2015, 3:23 PM
- JMP Securities initiates Pandora Media (NYSE:P) at a rating of Market Perform, with a pro/con list of attributes.
- On the plus side is Pandora's leadership among streaming music and growing share of listener hours, as well as continued benefits from the growth of mobile and in-dash car opportunities.
- Headwinds include decelerating growth in active users and uncertainty around content costs.
- The stock has been hovering just over a 19-month low it hit Feb. 6 in the wake of a revenue miss for Q4.
- Nearly a dozen analysts issued downgrades and lowered price targets following the earnings report.
Feb. 17, 2015, 3:36 PM
- Pandora Media (NYSE:P) made up some ground last week (+4.2%) from a 17% drop following its earnings, but is trading off again today, -2.9%.
- B. Riley has reiterated its Neutral rating on the stock and set a $12.50 price target.
- Macquarie today initiated coverage of Pandora with a Neutral rating and a $16 target.
- Pandora's in the midst of ongoing court battles, including a consumer privacy case in Michigan (where plaintiffs are urging a pro-Pandora decision be overturned) and a licensing-fee dispute in New York with publishing firm BMI.
- Shares are trading at $15.
- Previously: Pandora's Q4: Gains in listeners, listener hours, RPMs (Feb. 05 2015)
Feb. 6, 2015, 4:47 PM
- Pandora Media (P -17.2%) followed up last-night's after-hours action in kind during today's session, as the stock fell to a 19-month low, closing at $15.24.
- Nearly a dozen analysts responded today with downgrades and lower price targets. Stifel Nicolaus' John Egbert noticed that user metrics were promising but the holiday-season revenue miss was "disappointing and clearly ill-timed." He expected better for the next holiday season, after programmatic buying capabilities for mobile platforms come on line in the coming quarter. Stifel lowered its target to $25, from $29.
- Martin Pyykkonen at Rosenblatt called for more ad inventory: The company "can gradually drive its ad load rate upward to 10% year-over-year growth without disrupting the consumer listening experience." B. Riley, Wells Fargo, Raymond James and Maxim Group downgraded the stock.
- Wedbush and Albert Fried were (slightly) more positive: Wedbush reiterated its Outperform rating (though at a $27 target, instead of $35), and Albert Fried upgraded to Market Perform from Underweight, though with a $16 target.
- Previously: Pandora's Q4: Gains in listeners, listener hours, RPMs (Feb. 05 2015)
- Previously: Pandora plunges 19.9% after Q4 revenue miss (Feb. 05 2015)
Feb. 6, 2015, 12:45 PM
Feb. 6, 2015, 9:12 AM
Feb. 5, 2015, 5:35 PM
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