Shares of Pandora leaped in initial trading this morning, quickly exceeding yesterday's already raised expectations--and then spent the rest of the day heading inexorably downward.
In the first minutes of trading, Pandora's stock soared as high as about $25 per share, shortly after that began hovering at around $23 per share, and an hour or so into the day had slipped to just under $21. Those figures were well above the $16 price the company set yesterday when it priced the shares in its initial public offering at roughly twice the value that it expected just two weeks ago.
By the midpoint of the trading session, however, the downward trend took a dramatic turn, with shares plunging below $19.
The day wrapped up with Pandora standing at $17.42, not much above the company-designated price point and down from the opening price of $20.
Earlier this month, the company, which runs a personalized Web radio service, said in a regulatory filing that it expected to offer stock between $7 and $9 a share.
At the new pricing, Pandora was poised to raise $235 million. Roughly $96 million of that will go to Pandora, as some of its shareholders cash out. Hearst Corp., for example, is selling 8.7 million shares.
The IPO pricing of $16 put Pandora's market capitalization at $2.56 billion. That's sure to fuel talk that a new Internet bubble continues to grow. Pandora, after all, loses money.
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For the nine months that ended April 30, Pandora lost $6.8 million on sales of $51 million, compared to a $3 million loss on sales of $21.6 million in the same period a year ago, according to… Read more