Yesterday, music streaming service Pandora priced its IPO at $16 per share (valuing the company at $2.6 billion). The company originally set the range of its IPO at $7 to $9 per share, at a market cap of $1.3 billion; but upped the range last week to $10 to $12 per share, giving the company a valuation of $1.9 billion. Today, Pandora debuted, under the symbol ‘P’ on the New York Stock Exchange, opening at $20 per share (up 25 percent), valuing the company at $3.2 billion. Within minutes of trading, shares reached as high as $25, giving the company a $4 billion valuation.
The company raised $235 million in the IPO, offering approximately 14.7 million shares of common stock. A total of 6 million shares are being offered by Pandora, with selling stockholders offering 8.7 million shares. In addition, Pandora has granted the underwriters a 30-day option to purchase up to approximately an additional 2.2 million shares to cover over-allotments.
Pandora initially filed its S-1 in February, creating a ton of hype about the music company’s IPO. A few weeks ago, the company released its most recent revenue numbers, which reflected an increase in both sales and usage for the internet radio service. But the company, which now has 94 million users, has yet to make a profit.
How Pandora’s stock value will fare in the long term is unclear, given both the company’s financials and the mixed performance of tech company stock in the past few IPOs. LinkedIn shares popped 84 percent on the first trade of its offering to $83 per share, but dropped below this number of late (today’s LNKD shares opening at $76 per share).
Yandex shares opened at $35 per share, but have dropped slightly to $31.60 at market close yesterday. And Fusion-IO shares began trading at $25 per share (up 30 percent from pricing) but have leveled off at $23.00 per share.
As Pandora CEO Joseph Kennedy tells CNBC this morning, “the investors will determine the stock price.”
Photo Credit: @tconrad