Pandora shares surge up in its debut on the stock market

Pandora's stock price is surging upwards on the first day of trading today. The Internet streaming radio company launched its IPO today on the New York Stock Exchange and as of writing its stock price is over 40 percent higher than its initial price of $16 a share, according to CNBC.com. That would give the company a value of about $4 billion if it stays at that stock price level for the rest of the day.

Pandora was founded in 2000 and allows PC users to stream music that are based on suggestions given to the service by the users. The service can be used for free with ads or without ads with a subscription fee. While Pandora was popular with PC owners it really took off with the general public when free Pandora apps were developed for Apple's iPhone and iPod Touch in 2008. Pandora apps have also been released for Android and Windows Phone based devices as well. At the moment the service has about 94 million users, up from 53 million a year ago, and it has access to about 800,000 songs. According to CNBC.com it has over half of the streaming Internet music business.

Even with a large number of users and market share, Pandora has yet to make any money. In the first quarter of 2011 it lost $6.8 million while also doubling its revenue to $51 million. Most of the company's revenue comes from ad fees but the company claims that subscription fees from its users have been growing.

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The market works in bubbles, meaning they can't live without the excessive returns bubbles produce (well they could, but profit is the great motivator, so there you go). So now it's like what's the bubble for the 4-5 year cycle? Look at the past 30 years for example. You had the recession in the early 80's followed by a boom in the late 80's which produced the S&L bubble (very similar to the most recent bubble). Follow that with a recession in the early 90's. Then came the internet bubble in the late 90's. Recession followed in the early 00's. Then there came the housing bubble. Now we find ourselves in the early 10's and where are we? Another recession...what's the next bubble...?

KarbonKopy said,
If only they would get it working with on my Android phones I'd be excited.
I've had no issues with the free version of Pandora on my Nexus One.

It used to be that you needed 8 quarters of PROFIT to go public.

Now you can have only negative quarters and go public.

There's no bubble in tech coming? Please. This coming from a guy who works on Wall Street too. The writing's on the wall folks.

Throughout the dot-com bubble, NYSE never was able to tempt Intel and Microsoft away from NASDAQ with single-letter ticker symbols. I and M remain unoccupied to this day.

But P has now been snapped up by Pandora. I view that as an ominous sign, sort of like a dot-com spending its entire marketing budget on a Super Bowl commercial.

bdsams said,
Our memory is only 10 years old, no one is thinking about the bust in 2000.
No way. This is more like reptilian memory.