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Pandora Investor Looks to Up Stake in Company, Despite Stagnant Stock
Why? They may be betting on an acquisition.
It's been just over two weeks since Pandora pulled the curtain off Pandora Premium, its new all-you-can-eat streaming service, at a flashy event in southern Manhattan on Dec. 6.
Pandora Premium is still not available publicly, but even so the market has appeared unimpressed with its contours; Pandora Media stock, which ended Dec. 6 at $13.78 per share (before the announcement event), edged up seven cents the following day and has remained effectively flat since, before dropping to its current $13.29.
That stagnation has not deterred the Matrix Master Fund from seeking approval to increase its stake in the company, by over 5 percent. In a filing yesterday with the FCC -- required because of foreign ownership rules that govern the terrestrial radio station Pandora owns in South Dakota, a purchase which itself took the FCC a year to approve -- Matrix asks for both permission to increase its stake in the company and for the Commission to exempt Pandora from the "50 percent rule" that says no more than 49.99 percent of Pandora can be owned by a foreign company. The enlarged stake isn't imminent -- the last day to file replies on comments about the move is Feb. 7.
Why is Matrix betting against the market? The investment group, which has or had interests in 192 different companies including Apple, Oculus, Quora and Spotify-acquired The Echo Nest, may be anticipating an acquisition of Pandora in the year to come.
Four days prior to the debut of Pandora Premium, conflicting reports of an acquisition of Pandora by SiriusXM (and so Liberty Media, which owns 65 percent of the satellite radio company) hit the wires. In May, when the same rumor was percolating, Pandora's stock rose 32 percent over the course of a few weeks. This most recent turn of the rumor mill resulted, likely because it landed on a Friday, in a much more modest stock jump of four cents.
Equally likely, the fund is simply betting on the company's near future prospects. A strong marketing push behind Pandora Premium will arrive early next year; that arm of the company is, to say the least, robust.
Calls for comment to the FCC were not returned at press time. Pandora declined to comment. Matrix did not immediately responded to a request for comment.