Pandora Media (NYSE:P)

TMFnoceilings (67.52) Submitted: 10/5/2012 4:08:44 PM : Start Price: $10.33 P Score: +16.74

Pandora makes an outstanding product...nothing speaks more to that than its constantly growing listener base. Unfortunately, the economics of its business are just too ugly to ignore--when you're spending almost 60% of your revenue just to pay for the songs that give you the opportunity to air the adds that earn you some revenue, it's never a pretty picture. Not to mention: revenue per thousand listening hours (RPM) is dropping fast thanks to the mobile switch, and there are more than a few deep-pocketed competitors ready to step in should Pandora finagle itself more attractive royalty fees at some point in the future. Again, love the service...but not the stock.