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Pandora Media (P)

- NYSE
  • 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
    | 33 Comments
  • 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.
    | 4 Comments
  • 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.
    | 39 Comments
  • 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
    | 8 Comments
  • 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.
    | 13 Comments
  • 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%.
    | 2 Comments
  • Apr. 25, 2014, 12:47 PM
    | Comment!
  • Apr. 25, 2014, 12:18 PM
    • "Pandora (P -14.2%) faces a significant growth rate decline, and we think investors need to depart the bus and seek alternate modes of transportation,” is the blunt assessment of Albert Fried analyst Rich Tullo, who believes the stock’s decline will get worse before it gets better.
    • The key worry is Pandora’s count of active listeners, which grew 8% Y/Y to 75.3M in Q1, but that isn’t strong enough for some analysts, who worry that newer services, such as Apple's iRadio, Spotify and others, could pressure growth in the future (Q1 results).
    • Fried thinks the growing competition and high costs will continue to crimp Pandora’s bottom line and ultimately weigh on the stock price, whose target he cuts to $20 from $23.
    • Earlier: Other analysts are not as pessimistic.
    | 14 Comments
  • Apr. 25, 2014, 9:13 AM
    | 3 Comments
  • Apr. 25, 2014, 8:54 AM
    • Pandora (P) is now available in all 10 of the bestselling passenger vehicles, with 5M new activations in Q1, notes Needham's Laura Martin, reiterating a Buy rating and $41 price target and sharing her key takeaways from the earnings call (transcript). "We estimate that P has a 5 year head start over other ad-driven streaming services." Her team raises expected FY EPS to $0.17 from $0.15 an sets FY15 EPS at $0.48.
    • Mobile ad revenue of $103M increased 59% Y/Y, driven by rising audio ads, say Cowen's John Blackledge, maintaining his Outperform and $41 price target. Mobile advertising RPM of $29.46, up 44% Y/Y was slightly ahead of his team's forecast. "As in-car listening hours ramp, currently ~5% of total listening hours, P is likely to air more in-car audio ads than on other devices to offset the inability to offer video/display ads."
    • Previous earnings coverage
    • Shares -5.9% premarket
    | Comment!
  • Apr. 24, 2014, 4:36 PM
    • Pandora (P) expects Q2 revenue of $213M-$218M and EPS of $0.00-$0.03, below a consensus of $219.3M and $0.05. Full-year guidance is for revenue of $880M-$900M (up $10M from prior guidance) and EPS of $0.14-$0.18 (up $0.01) vs. a consensus of $892.3M and $0.16. Shares -5% AH. (Q1 results, PR)
    • SunPower (SPWR) expects Q2 revenue of $575M-$625M and EPS of $0.15-$0.35, largely below a consensus of $628.3M and $0.30. Full-year guidance is stronger: revenue of $2.5B-$2.65B and EPS of $1.10-$1.40 vs. a consensus of $2.55B and $1.21. Shares +0.9% AH. (Q1 results, PR)
    • Broadcom (BRCM) expects Q2 revenue of $2B-$2.1B vs. a $2.07B consensus. Gross margin is expected to rise 75-175 bps Q/Q. Shares -0.2% AH. (Q1 results, PR)
    | Comment!
  • Apr. 24, 2014, 4:03 PM
    • Pandora Media (P): Q1 EPS of -$0.13 beats by $0.02.
    • Revenue of $180.1M beats by $5.16M.
    • Shares -4.4%.
    • Press Release
    | 13 Comments
  • Apr. 24, 2014, 12:10 AM
  • Apr. 23, 2014, 5:35 PM
  • Apr. 21, 2014, 11:17 AM
    | 13 Comments
  • Apr. 21, 2014, 11:09 AM
    • Sony, Universal, Warner Music, and indie label ABKCO are suing Pandora (P +1%) for allegedly violating New York's common-law copyright protections by not paying recording royalties on songs recorded before Feb. 15, 1972.
    • The songs in question include works from popular acts such as the Beatles, the Rolling Stones, and Bob Dylan. They aren't covered by federal copyright law, but the labels argue state law takes precedent.
    • Pandora's recording royalty payments to SoundExchange for songs made after Feb. 1972 account for the lion's share of its licensing costs. The company recently claimed (while explaining a subscription fee hike) the rate it pays SoundExchange has risen 53% over the last 5 years, and is set to rise another 9% in 2015.
    • How times have changed: U.S. copyright law originally provided protection for only 14 years, with the right to renew for another 14 if the original copyright holder is still alive.
    | 3 Comments
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Company Description
Pandora Media Inc provides internet radio services on smartphones, tablets, traditional computers and car audio systems, as well as other internet-connected devices.