Mega music streaming site Pandora has officially announced their IPO (initial public offering), opening above expectations at $20 a share. After rising into the low $20s on the day of its IPO, the stock fell back to around $18 at the the end of Wednesday. But the decline escalated on Thursday closing at $13.26. Some of the drop came after BTIG Research analyst Rich Greenfield began his tracking of Pandora with a Sell rating and a target price of $5.50.
Pandora’s problems stem from its large fixed streaming costs, which just get higher the more popular it becomes. “Pandora is a great consumer music service, but its business model does not scale in the same way as other successful Internet businesses,” wrote Greenfield (via Hypebot).
Even with steadily decreasing numbers, there are still many who buy into the idea of Pandora as a public company due to its easy to use platform, ability to discover new music and its 75 million listeners. Valuing at around $2.6 billion, Pandora is the most listened to music streaming site in the world.