After filing for an IPO in Februrary, 2011, streaming music company Pandora went public on June 15, 2011 with little fanfare.\u00a0 In contrast to LinkedIn which went public last month with a soaring valuation, Pandora\u2019s valuation has been largely as expected.\u00a0 Off the heels of LinkedIn, this could be seen as disappointing.<\/p>\n
Here is a timeline of Pandora\u2019s valuation:<\/p>\n
Early June 2011: $10-12\/share; $1.9 billion valuation
\nJune 14, 2011: $16\/share; $2.6 billion valuation
\nJune 15, 2011 (first day of trading): opened at $20\/share, closed at $17.42\/share; $3 billion valuation
\nJune 16, 2011: opened at $16.99\/share, closed at $13.26; $2.1 billion valuation<\/p>\n
More recently, Pandora has been trading at more than 25% below the opening price.<\/p>\n
What caused this slide?<\/p>\n
Pandora has close to 95 million registered users and 800,000 songs in its online database, yet lost $6.8 million in the first quarter of 2011 despite bringing in $51 million over the same period.\u00a0 Only since July, 2009 have SoundExchange royalty rates for Internet radio been low enough for streaming sites to conceivably make money, and Pandora hasn\u2019t been able to catch up thus far.\u00a0 Therefore, it seems likely that this slide is the result of a market correction.<\/p>\n
In other words, Pandora\u2019s lukewarm trading may simply be attributed to a lukewarm company that hasn\u2019t been profitable to date.\u00a0 Renren is another social media company that has disappointed in its IPO, similarly carrying large debts.<\/p>\n
Groupon filed for an IPO on June 2, 2011.\u00a0 Like Pandora and Renren, Groupon has underperformed financially despite large user bases.\u00a0 Groupon has steadily lost money each quarter, including $146.5 million in this year\u2019s first quarter.\u00a0 Despite the fact that Groupon\u2019s S-1 form has allowed potential investors to further scrutinize Groupon\u2019s business model and financial plans, investors still estimate Groupon\u2019s valuation to be anywhere from $20-30 billion.\u00a0 For reference, Google\u2019s IPO was worth $25 billion.\u00a0 Groupon is projected to go public in late August to early September.\u00a0 It remains to be seen which path Groupon will follow: LinkedIn\u2019s, or Pandora\u2019s.<\/p>\n
31 more technology and Internet companies are estimated to go public by the end of 2011, the most in similar fields since 2000. \u00a0Livingsocial just declared for an IPO this week, while Zynga is rumored to be filing for an IPO within the next couple of weeks.<\/p>\n","protected":false},"excerpt":{"rendered":"
After filing for an IPO in Februrary, 2011, streaming music company Pandora went public on June 15, 2011 with little fanfare.\u00a0 In contrast to LinkedIn which went public last month with a soaring valuation, Pandora\u2019s valuation has been largely as expected.\u00a0 Off the heels of LinkedIn, this could be seen as disappointing. Here is a…<\/p>\n","protected":false},"author":10,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[8],"tags":[380,188,290,289,383,379,382,381,32,67,307],"ppma_author":[2085],"acf":[],"yoast_head":"\n