We promise there won’t be daily updates on Pandora’s stock price from now on – it’s just in the early days that the industry is eagerly scrutinising how investors react to the music service’s IPO. A strong opening day was followed by an optimism-popping second day on the market, as the price dropped 24% and ended up around 17% below the original IPO price. The Wall Street Journal suggests that a sharp fall in the last hour of trading was due to a report from BTIG analyst Rich Greenfield, who suggests the target price for Pandora stock will be around the $5.50 mark. Why? Greenfield points to the royalty payments issue, which will become more onerous the more successful the company becomes. However, he also claims ad rates will go down as more users shift from Pandora on their computers to Pandora on their phones; and warns that the company needs to do more with social features to fend off upcoming competition from big guns and new startups alike.
Pandora stock falls 24% on second day of trading
June 17th, 2011 by Music Ally