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Jbay76 (< 20)

Pandora, word for the wise

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June 14, 2011 – Comments (6) | RELATED TICKERS: LNKD

Now I love Pandora and my ability to listen to practically any genre of music I want wherever there is internet.  But, I would never invest in the company, especially after reading this article. So, given that a lot of people have invested in other IPO's of late, LinkedIn comes to mind, I hope this will bring a bit of caution into perspective before becoming an owner in a business model that loses money.  Oh how I do love its service though........

6 Comments – Post Your Own

#1) On June 14, 2011 at 3:11 PM, rfaramir (29.57) wrote:

The problem is intellectual monopoly privilege in the US (enshrined in the Constitution, but one of its faults) embodied in the corrupt labels.

If its costs were lower, its small revenue per transaction could be real profits. But not now, and not in any reasonable near future.

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#2) On June 14, 2011 at 5:18 PM, kdakota630 (29.81) wrote:

I'd never even heard of Pandora (minus her box and the video games involving Greek mythology such as God of War III), but with LinkedIn, Facebook and this, perhaps we're looking at Tech Bubble 2.0.

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#3) On June 15, 2011 at 9:48 AM, Jbay76 (< 20) wrote:

Pandora is an awesome online music/radio station that has floored me with their selections and genre's.  I can go from Afro-cuabn jazz, straigh to bluegrass via YMSB, to Phis, Trey A., to GD, to Hepcat to Brazaillian Jazz to New Orleans style jazz and so on and so on and the music is great!  At 30 some odd bucks a year, no commercials and no interruptions...its awesome.  It has negated the need to go out to dinner as I can have all the music and ambience I need to compliment my cooking and brews.  It's a shame they are losing money hand over fist becuase I would be a shareholder otherwise.  But since they're biz model sucks, I'll use my money elsewhere.

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#4) On June 15, 2011 at 10:14 AM, FreeMarkets (97.61) wrote:

I use Pandora through my SONOS system.  I don't pay a dime and don't get any commercials.  I have to admit I love it, but I don't think I'd ever pay for it.  I do pay $50/year for Napster.  That allows me to listen to nearly any group/album/song whenever I want.  So if I absolutely have to hear "Black Dog" by Led Zeppelin, I can get my fix immediately.  With Pandora you might not hear that song for hours.

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#5) On June 15, 2011 at 11:18 AM, DaveMarcus82 (34.54) wrote:

Does anyone else find it ironic that the name of the company is Pandora?? I'm starting to feel a bit queasy "as the evil that cannot be undone" of this social media bubble is sure to come crashing down, be it next week, or in a year after another dozen of these companies petition for their own IPO. 

The numbers just DO NOT make sense. Why does a company that doesn't turn a profit, and has free competitors springing up all over the smartphone and tablet world, deserve the demand they are attracting?

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#6) On June 15, 2011 at 11:19 AM, russiangambit (29.49) wrote:

I like this comparison to options. We don't value options on P/E basis and these tech bubble 2.0 stocks are very similar. Very is high probability of them going to nowhere, completely whiping out your investment. You have to value them based on probability of that rather then their earnings.

"These (Internet) stocks area actually impossible to value... what you're buying is an option," Keith Woolcock, director at 5th Column Ideas told CNBC".

In case of Pandora my udnserstanding is that every new user costs extra in licensing costs therefore it doesn't matter how big Pandora grows they cannot be very poriftable. Plus, there is a low barrier to entry. 

 

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