Pandora Shares Sing at Debut, Then Fall
Pandora IPO story updated with afternoon share price information.
NEW YORK (TheStreet) -- Shares of Pandora Media surged more than 63% in their market debut Wednesday, as strong investor interest in the social media sector continues.
But while the stock hit $26 at one point during morning trading -- which valued the company at more than $4 billion -- shares fell to around $18.50 by midday. Shares are still trading above the IPO price of $16 set Tuesday evening.
Last week Pandora increased its price to between $10 and $12, up from its prior range of $7 to $9 a share.
Pandora's IPO comes in the footsteps of other recent Internet IPO successes including LinkedIn, which saw shares more than double in its first day of trading, and Yandex, the Russian Internet search shop that saw its stock jump more than 40% on its U.S. trading debut.
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While Pandora has posted significant growth and a rapidly expanding user base -- it comprises about half the Internet radio market -- it faces losses and mounting competition from tech powerhouses like Apple, Google and Amazon, who are also breaking into the online music space.
Pandora lets listeners create personalized radio stations based on their tastes. Listeners can then provide feedback by selecting "thumbs up" or "thumbs down" to influence the types of songs that are played going forward.
The service is available for free through the Web, tablets and smartphones and is also integrated into the sound systems of several car makers. The company's iPad app is the most downloaded free app in the history of Apple's App Store and its iPhone app is the second-most popular, following Facebook.
Pandora generates about 87% of its revenue from display and audio ads. However, users can buy a subscription to the service to bypass ads.
