Pandora Media, Inc. (NYSE: P)
Pandora Media, Inc. (P), an internet radio services company, on Wednesday evening received positive news from the U.S government’s Copyright Royalty Board. The Board is responsible for setting the rates that streaming services must pay artists for playing their songs. The rate decided was $0.17 per 100 plays during 2016. This is a 15% increase from what Pandora was currently paying which was $0.14 per 100 plays. This is viewed as a major victory as copyright holders were looking for a 79% increase. The bigger news was that going forward the Consumer Price Index will determine the new rates. “That’s amazing,” TheStreet‘s Jim Cramer said on CNBC’s Squawk on the Street Thursday morning, noting that the Consumer Price Index has not been going up.”What a win,” he added. “What a way to play deflation.” (The Street). Having costs seemingly under control in the near future Pandora stock should see a boost.
Pandora Media, Inc. CEO Comments
“This is a balanced rate that we can work with and grow from. The new rate structure will enable continued investment by Pandora to drive forward a thriving and vibrant future for music,” said Brian McAndrews, chief executive officer of Pandora. “Working collaboratively with partners across the music industry is a top priority as we connect listeners with music they love, and artists with their audience.” Business Wire
P Technical Analysis
P gapped up in price yesterday to $15.90, up from the prior day’s close of $13.44, which is an 18% increase on the favorable news. Taking a look at the daily chart, we can see the last time P traded above this price level was on October 22nd, when it traded at $19.19. On that occasion, Pandora tanked all the way to lows of $11.50 the very next day of trading, a 40% drop in price. The drop was due to lower than expected third quarter earnings numbers. A week later, P hit its 52 week low price of $11.38. Since that drop, it has slowly started to rebound off of the lows. P does have a float of 196.84 million shares and is trading over the normal daily trading volume. P did reach pre market highs of $16.57, but gave back $0.67 at the open, or equivalent to 4%. For trading purposes, my entry point would have been $16.00 looking for a run to $16.50. My stop loss would have been $15.80, fearing anything below that and the stock would start to fill in the gap up.
Company Profile
Pandora Media, Inc. provides Internet radio services in the United States. The company allows listeners to create up to 100 personalized stations to access free music and comedy catalogs, as well as offers Pandora One, a paid subscription service to listeners. It also sells audio, display, and video advertising to advertisers for delivery on computer, mobile, and other connected device platforms. As of December 31, 2014, the company had approximately 250 million registered users; and 81.5 million active users. Pandora Media, Inc. was founded in 2000 and is headquartered in Oakland, California. Yahoo Finance
