Jul. 8, 2014, 12:45 PM
- Echoes of April: Following a big May/June rally that propelled the Nasdaq to new post-Dot.com bubble highs, momentum stocks are nosediving nearly across the board today.
- The selloff comes ahead of Alcoa's afternoon Q2 report, the unofficial start of earnings season. Some of the cash going out of equities is flowing into Treasurys.
- Notable 6%+ decliners: TWTR -7.6%. DDD -6.5%. SSYS -7.9%. P -7.7%. LNKD -7.1%. DATA -10.1%. SPLK -9.3%. WDAY -7.7%. YELP -8.3%. GOGO -6.5%. YOKU -6.6%. ZU -10.5%. NOW -6.8%.
Jul. 1, 2014, 4:15 PM
- Google (GOOG +1.3%) says it will "explore ways" to integrate Songza, whose Android/iOS apps (5.5M MAUs) deliver human-curated music stations based on mood and activity, with Google Play Music. "We view the Songza acquisition as a way to further enhance our radio feature by adding their expertise on context."
- The Web giant adds it will also look at ways to use Songza's curation/music recommendation expertise within YouTube and other products. Google has already announced plans to launch a YouTube music subscription service later this summer.
- No purchase price is given for the deal. The NY Post previously reported Google had offered $15M.
- Pandora (P), which currently has 77M active users to Songza's 5.5M, is down 2.1% AH.
- Update: The NYT reports Google paid more than $39M for Songza.
Jun. 24, 2014, 12:39 PM
- A talk with Pandora's (P +3.4%) IR team has given Canaccord's Michael Graham (Buy, $43 PT) "renewed confidence in Pandora’s ability to exceed [Canaccord's] revenue targets over time, especially when viewed through the lens of future local sales capacity."
- Pandora has been spending heavily to grow its local ad salesforce: Sales/marketing spend rose 63% Y/Y in Q1 to $61.8M.
- Meanwhile, MKM's Rob Sanderson (Buy) believes Pandora could see $5.60/year in EPS one day with the help of rising ad load. He observes that while Pandora has a 9% share of ad-supported radio listening, its audio ad sales "represented less than 2% share of the spending pie last year."
- Pandora's 2014 and 2015 EPS consensus estimates are only at $0.17 and $0.48, respectively. Though its ad load has been rising, the company has been taking a measured approach in order not to alienate users who have plenty of alternatives.
- Shares have topped $29 for the first time since April.
Jun. 13, 2014, 9:18 AM
- YELP +9.4% premarket, Groupon (GRPN) +7.1%, Pandora (P) +3.5%, Angie's List (ANGI) +4.7%, TripAdvisor (TRIP) +3%, and Zynga (ZNGA) +2.3% after Priceline announces it's buying OpenTable for $2.6B (a 46% premium to yesterday's close).
- OpenTable (OPEN), meanwhile, is up to $104.18 - $1.18 above Priceline's acquisition price - as investors bet a higher offer (perhaps from Google, eBay, or Amazon?) will arrive.
- The deal is the largest acquisition of a public U.S. Internet company in recent history.
Jun. 12, 2014, 9:20 AM
- Prime Music will provide ad-free, on-demand streaming to 1M+ songs to Amazon's (AMZN) Prime subs. Mobile streaming is included, as is an offline download option.
- As expected, popular Universal Music acts aren't included, and neither are most current hits from other labels. TechCrunch observes only 1 of the top-10 songs in the Billboard Hot 100 is available.
- In terms of size, Amazon's catalog is roughly on par with Pandora's (P), but much smaller than Spotify's 20M+. Amazon's primary goal, of course, is to keep its Prime sub base (reportedly now above 20M) happy, and to give others a fresh incentive to sign up for the $99/year service.
Jun. 11, 2014, 4:33 PM
- Amazon's (AMZN) Prime streaming music service won't feature Universal Music's catalog, the NYT reports. The NY Post reports something similar, while adding the service is expected to launch tomorrow.
- The NYT also states the ad-free service "will omit most new releases" - BuzzFeed has reported only songs at least 6 months old will be offered - and that Amazon "used an outside firm to obtain 'compulsory' [songwriter] licenses" through federal copyright provisions, after publishers rejected proposed contracts.
- Universal Music is one of the big-3 labels (along with Sony and Warner Music). Its artist list includes Eminem, Lady Gaga, Jay-Z, U2, and many other popular acts.
- Pandora (P) closed sharply higher following the report. Its shares fell on May 30, after BuzzFeed's report arrived.
- An Amazon event widely expected to feature a 3D smartphone launch is due a week from today.
Jun. 6, 2014, 1:38 PM
- The NY Post reports Google (GOOG +0.3%) is in talks to buy streaming radio service Songza; one source reports the offer price is $15M.
- Songa's Android/iOS apps offer curated radio stations based on mood and activity - Beats Music, soon to be in Apple's hands, does something similar.
- The company has 5.5M active users - a base much smaller than Pandora's (P +1.2%) 77M. Pandora has dipped slightly in response to the report, but remains up on the day.
- Buying Songza would provide a shot in the arm for Google's music efforts. All signs suggest the company's Spotify-like All Access music service has seen limited uptake since launching last year.
- A reported YouTube music service (would feature both music videos and audio-only streaming) might fare better, if Google can reach terms with music labels.
Jun. 4, 2014, 11:07 AM
- In its last monthly audience report (quarterly numbers will still be given), Pandora (P -2.2%) states it had 77M active listeners in May, up from 76M in April and 70.8M a year ago.
- However, listener hours only rose 1.7% M/M (in spite of an extra day) to 1.73B. On a Y/Y basis, they rose 28%.
- Pandora's share of total U.S. radio listening (influenced by seasonality) was 9.13%, down from 9.28% in April and up from 7.29% a year ago.
- The numbers come amid worries about the Apple/Beats deal, an expected iTunes Radio revamp, and Amazon's reported plans to launch a streaming music service bundled with Prime subscriptions.
May. 30, 2014, 11:03 AM
- A BuzzFeed report stating Amazon is set to launch a streaming music service (covers songs at least 6 months old) that will be free for Prime subs is leading Pandora (P) to slump.
- Amazon's Prime sub base (~20M as of January, per Macquarie) is notably smaller than Pandora's active listener base (76M at the end of April) for now. Pandora, aided by its giant music-tagging database (i.e. the Music Genome Project) and the time invested by users in creating custom stations, has thus far weathered challenges from Spotify, Apple, and Google, among others.
- Shares largely moved sideways yesterday after Apple announced it's acquiring Beats and its subscription streaming service.
May. 29, 2014, 2:04 PM
- Beats Music will continue supporting Android and Windows Phone post-acquisition, says Tim Cook (AAPL +1.5%). Though not a total surprise, the remarks represent the first time Apple has committed to offering apps for 3rd-party mobile platforms.
- Meanwhile, during a Code Conference talk also featuring Jimmy Iovine (live blog), Eddy Cue states Beats Music, launched only in January and trumpeted by Apple far more over the last 24 hours than Beats' headphones, now has 250K subs (via 5M downloads) - far more than the 111K it reportedly had as of March. Market leader Spotify recently topped 10M paid subs.
- Cue adds iTunes has surpassed 35B cumulative song purchases (up from 25B in Feb. '13), and that iTunes Radio now has 40M listeners; Pandora (P +0.1%) had 76M active listeners at the end of April.
- He also proclaims Apple has "the best product pipeline that I’ve seen in my 25 years at Apple," and reiterates his dislike of the current TV-viewing experience. "All we have today is glorified VCRs ... You have a bunch of disparate systems. There's no standards."
- Shares are making fresh 52-week highs, aided by PT hikes from UBS, Baird, and Piper. UBS sees U.S. survey data about iPhone contract lengths pointing to a huge iPhone 6 upgrade cycle.
- More on Apple/Beats
May. 28, 2014, 5:59 PM
- "The ugly truth is that there is such a Berlin Wall between Silicon Valley and L.A. ... The two don't respect each other, don't understand each other," says Tim Cook. He's hoping new employees Jimmy Iovine and Dr. Dre will act as a bridge.
- The WSJ states Iovine and Dre will "work with both Apple's (AAPL) electronics and music-streaming divisions, spending as much time at [Apple HQ] as necessary." In an employee memo, Cook says the Beats team will report to Internet services chief Eddy Cue.
- Cook offers high praise for Beats Music, which pairs an algorithm with human curation. "We love the subscription service that they built—we think it's the first one that really got it right." He suggests in his memo the service will be integrated with iTunes.
- In an interview, Cook refers to Beats' headphone ops as "a reasonable-size business that’s fast-growing." He also predicts the deal will be accretive to FY15 (ends Sep. '15) EPS.
- IFPI estimates global music streaming/subscription sales rose 51% Y/Y in 2013, and that download sales (still 2/3 of all revenue) fell 2%. Back in March, Apple was reported to be mulling a subscription music service, and thinking of offering an Android iTunes app.
- Pandora (P), which fell when the first Apple/Beats reports arrived, is down 1% AH.
- Previous coverage
May. 12, 2014, 8:50 AM
- With shares down 44% from a March high of $40.44, MKM has upgraded Pandora (P) to Buy. The firm cites Pandora's sticky audience - the company has held Apple, Spotify, and a slew of other rivals at bay - and improving ad monetization/targeting.
- Pandora ticked higher on Friday, shrugging off reports Apple is set to acquire Beats Electronics. MKM's upgrade comes five days after Pandora launched Promoted Stations, an ad solution that allows marketers to promote audio streams within a user's Stations You Might Like playlist section.
- MKM started Pandora at Sell a year ago, when shares were at $16. It upgraded the Web radio leader to Neutral on March 5, when shares were at $39.
May. 9, 2014, 7:57 AM
- In a Facebook video posted by actor Tyrese Gibson, Beats co-founder Dr. Dre appears to confirm (with colorful language) his company is getting bought by Apple (AAPL) for a large sum.
- Separately, the NY Post reports Beats' other co-founder, music industry legend Jimmy Iovine, is in talks to join Apple as a creative "special adviser" to Tim Cook.
- Questions are flying about Apple's intentions for Beats, and whether the deal represents a big strategy change. While Apple has bought plenty of component, software, and services firms over the years, it has shied away from acquiring established electronics hardware brands in favor of a do-it-yourself approach. Also, audiophiles generally aren't huge fans of Beats' headphones.
- At the same time, Beats, as a consumer brand known for premium pricing, a loyal customer base, and simple/iconic design, has more than a few things in common with Apple.
- Music industry sources tell re/code Beats is doing over $1B/year in sales. The site also speculates Apple is interested in Beats' streaming service - Billboard reported in March Apple is talking with labels about a subscription streaming service, and is thinking of offering an iTunes Android app.
- Apple -0.4% premarket. Pandora (P) -3.2%; the company is no stranger to selling off on reports of Apple music forays.
May. 6, 2014, 3:27 PM
- Twitter (TWTR -16.9%) opened below $36 on lockup expiration day and has steadily moved lower since; today's volume (110M shares) is already over 8x the company's daily average.
- A lack of a secondary offering to alleviate selling pressure might be contributing to Twitter's woes: On the Q1 CC, CFO Mike Gupta argued commitments from major holders not to sell (for the time being) eliminated the need for a secondary.
- After factoring options/RSUs, shares still go for ~10x 2015E sales exc. cash.
- The microblogging leader is headlining a fresh selloff in tech momentum plays. Yelp (YELP -12.7%) is also a noteworthy decliner - shares are now down 10% from where they traded prior to Yelp's April 30 Q1 beat.
- Pandora (P -8.4%) is down sharply after posting April metrics that included a slight M/M drop in listener hours, and YY (YY -7.9%) is selling off in spite of a Q1 beat and strong Q2 guidance.
- Morgan Stanley is defending YY: The firm highlights YY's mobile music growth - revenue +180% Q/Q and now 8% of total music revenue - and considers worries about a government crackdown on illicit content overblown. Deutsche, meanwhile, recently called YY's 100.com online education platform "“a potentially disruptive force in standardized test-prep market."
- Earlier: Twitter -4.9% premarket as lockup expires
May. 6, 2014, 8:55 AM
- Pandora's (P) April listener hours totaled 1.7B, down fractionally from March's 1.71B (the impact of one less day) but up 30% Y/Y.
- Active listeners rose to 76M from 75.3M in March and 70.1M a year ago. The company's U.S. radio listening share (affected some by seasonality) rose to 9.28% from 9.11% in March and 7.33% a year ago.
- Pandora has said it'll stop providing monthly metrics (quarterly numbers will still be shared) following its May numbers (to be provided next month). Shares are off sharply from a 52-week high of $40.44 after the company provided disappointing guidance in its Q1 report.
May. 1, 2014, 12:26 PM
- Yelp's Q1 report, which was accompanied by a full-year guidance hike and followed by a slew of upgrades, is helping fuel a major rally in high-beta Internet stocks that were pummeled over much of March and April.
- LinkedIn (LNKD +5.5%), which reports after the close and entered trading down 40% from a high of $257.56, is among the notable gainers. As are Twitter (TWTR +3.5%), crushed yesterday in response to its Q1 numbers and guidance, and Pandora (P +6.5%), hit hard last Friday due to the light Q2 guidance provided with a Q1 beat.
- Facebook (FB +3.5%), less damaged by the selloff than some peers, is posting solid gains as the Street gives a thumbs-up to yesterday's mobile ad network launch. "Facebook is essentially bringing the high advertising ROI and targeting precision it has perfected on its own app to the rest of the mobile web," proclaims Goldman, albeit while cautioning near-term sales will be limited.
- Netlifx (NFLX +5.5%), off 30% from its high going into trading in spite of a positive response to last week's Q1 beat and price hike announcement, is bouncing strongly.
- Other gainers: ZU +5.9%. TRLA +5.6% (rallied yesterday following earnings). PCLN +2.8%. EXPE +3.7%. MEET +4.3%. LIVE +9.9%. ANGI +3%.
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