Pity poor Pandora.
The Internet radio company’s stock price has been getting whiplashed by news of Apple’s progress, or lack thereof, in launching a streaming radio service.
On Thursday, a Bloomberg report that Apple is on track to go live with its service in 2013 sent Pandora’s stock sinking nearly 12% in after-hours trading. This is in spite of the fact that Apple’s negotiations with major rights holders to obtain music licenses for the service have been extensively covered since early September by numerous news outlets, including Billboard.
Apple News Takes Bite Out of Pandora’s Market Cap
Just two days earlier, Pandora’s stock gained 8.4% after Apple executives made no mention of its plans for a radio service at a press conference to announce a slew of new products, including the iPad mini tablet. Investors apparently gave Pandora shares a “relief rally” at the lack of news for the so-called “iRadio” service.
Apple declined to comment on the rumors.
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It wasn’t just Pandora that got the thumbs down from investors Thursday. Amazon.com and Apple also suffered small declines after releasing earnings reports and projections that missed Wall Street expectations.
Amazon’s posted its first quarterly net loss in four years, sending its shares down $2.17 to $220.75 in after-hours trading following its earnings release.
Apple’s iRadio Blossoms Into Internet Radio Market
Apple, meanwhile, posted $8.2 billion in net income on $36 billion in sales for its fiscal fourth quarter, up 24% and 27% respectively from a year earlier. But that was not enough for investors, who initially pushed the stock down on concerns about the company’s declining profit margins. They later eased up, leaving the stock price essentially flat, after Apple executives explained the forecast in a call with analysts.
Apple’s stock had dropped $7.29 to close at $609.54 prior to releasing its financial results.
Among the biggest reason for lower profits is the cost of manufacturing a slew of new products coming out this fall, Apple’s Chief Financial Officer Peter Oppenheimer said. Apple on Tuesday unveiled a new iPad mini tablet, as well as new versions of its larger-sized iPad, iMac and MacBook Pro computers. Component costs for new devices tend to be highest when they are first released.
“This is the most prolific product release Apple has done,” Oppenheimer said. “But there are costs associated with increases in demand.”
The company made no mention during its earnings presentation of the new iTunes 11, which Apple executives showed off in September, promising an October release. With the month drawing to a close, some are speculating that the silence means Apple could miss its launch window. Again, Apple would not comment on the exact timing of the new iTunes rollout.