NEW YORK - Online music service Pandora Media late Tuesday priced its initial public offering of 14.7 million shares at $16, above the previously targeted $10-$12 target range.
That means that the move to go public will generate $235 million in proceeds for itself and shareholders, including Hearst Corp.
The company will use its portion of the proceeds, slightly below $100 million, for dividends and general corporate purposes.
The company, which has about 94 million registered users, will have a market capitalization of $2.56 billion.
Originally, it had only planned to offer 13.7 million shares at a range of $7 to $9.
Founded in 2000, the Oakland, Calif.-based firm reported $167 million in revenue for the past 12 months, but has never been profitable.
Pandora shares will start trading on the New York Stock Exchange under the ticker symbol P on Wednesday.
BTIG analyst Richard Greenfield has suggested that investors stay away from the IPO. "As consumers we love Pandora," he wrote on Friday. "It is free, incredibly easy-to-use, works across a growing array of platforms in/out-of-home and has a de minimis amount of advertising compared to terrestrial radio.
However, "investing in Pandora is a whole different story," Greenfield said. "While Pandora is creating a large active user base, its reach/frequency continues to pale in comparison to terrestrial radio, as does its profitability." Overall, Pandora's financial outlook did not justify its previous IPO price range, the analyst said.
Click here for Five Questions We Have About Pandora's IPO on Wednesday