Pandora is already overvalued, say analysts |
| MarketWatch - Jun 16, 2011 |
Amid the euphoria of Pandora Media Inc.’s stock listing Wednesday, investors may want to take a moment to figure out how the Internet radio service will make money in the years ahead.
Pandora shares /quotes/zigman/5419837/quotes/nls/p P +0.60% rose more than 40% at the open to top $22 a share, becoming the latest initial public offerings from an Internet company to rapidly achieve a soaring valuation.
Mobile devices could threaten Pandora’s advertising revenues.
Oakland, Calif.–based Pandora had priced its IPO late Tuesday at $16 a share, above its recently raised range of $10 to $12 a share, giving it a $2.6 billion valuation. Read story about Pandora’s IPO.
But at least some Wall Street analysts are skeptical whether the largely advertising-supported Internet radio service can bring in the dollars to justify its price tag.
“It’s not that we think Pandora won’t be profitable,” said Richard Greenfield, an analyst at BTIG Equity Research. “We don’t think that profits will be enough to justify the valuation.”
Read Full Article from MarketWatch
- Posted: 2011-06-16 15:04:04
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