Pandora Media FPO Announcement Shoots Down Stock Price


Pandora media (NYSE: P) yesterday announced a proposal to commence a fully underwritten follow-on public offering of 10 Million shares. The company will also offer an additional 4 million shares which will be offered for sale by the current stockholders. The underwriters to the issue in addition will have a 30-day option to purchase a further 2.1 million shares.

Assuming that the issue will be fully subscribed, the company will end up raising close to $230 million from the issue, excluding the option available to the underwriters. The proposed amount to be raised is significantly large compared to the company’s last reported cash balance of $53 million with a quarterly cash outflow of $12 million for the July 2013 ending quarter. Pandora has been losing money over the last few quarters and its huge cash outflows have been reducing the cash balance available at every quarter end. The announced follow on issue will have a 5% dilutive effect on the current stock holders. According to the company statements, the proceeds from the issue will be used for general corporate purposes, and considering the significantly high amount of funds the company is attempting to raise, the market did not take kindly to the announcement. The stock dipped more than 4.5% in after-hours trade following the announcement of the follow-on offering.

To see Pandora’s latest stock price movement, click here (NYSE: P)

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Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a certified/registered investment advisor, and the opinions expressed should not be treated as investment advice. Buying and selling of securities carries the risk of monetary losses. Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions. Neither Amigobulls, nor the author have any business relationship with any of the companies covered in this post.

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Comments on this article and P stock

WW Evans
This might have a negative impact in the long-run. The company is already making huge losses..
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