Is Pandora putting itself on the market? A New York Times report, published just hours before Pandora released fourth quarter and 2015 earnings, claims the Internet radio company has engaged Morgan Stanley to meet potential buyers. A Pandora representative told Billboard the company “decline[s] to comment on rumor or speculation.”
The news might be nothing more than standard Wall Street speculation that goes unfulfilled. “It could be some investor somewhere to create a floor beneath a battered stock — which Pandora certainly has been lately,” says Jeff Reeves, analyst and executive editor at InvestorPlace.com.
But the claim isn’t outlandish. Before the report, which caused roughly 9 percent spike, Pandora shares had lost about 67 percent of their value over the last 12 months. New listeners and listener growth have reached a plateau amidst heavy competition from Spotify and Apple Music. Pandora has recently sought new avenues for growth: the acquisition of Ticketfly, the purchase of some Rdio assets to build an on-demand service, and a planned international expansion.
Tech stocks like Pandora have run into problems as investors have lost appetite for risky growth stocks and are seeking safer havens. Reeves points to LinkedIn, down 54 percent year to date, and cloud computing company Tableau as stocks that have been hit hard in 2016. “It’s hard to have hope and be patient when things don’t look good around the world. You’re not going to give LinkedIn or Pandora or any of these tech stocks the benefit of the doubt.”