Pandora Shares Fall Below IPO Price
The stock of the online music company declines 24% on its second day to close at $13.26.
NEW YORK - Shares of online music firm Pandora Music fell below their IPO price on Thursday in a sign of waning investor interest after a gain in the company's stock market debut a day earlier.
The stock fell 23.9% to $13.26, given the company a market value of $2.1 billion. The stock had priced at $16 in its IPO and gone as high $26 on its first day of trading.
Some analysts have argued that the stock is worth less than its IPO price suggested, citing Pandora's lack of profitability to-date.
BTIG analyst Richard Greenfield, who has been a vocal critic of the company's increased IPO price, on Thursday formally initiated coverage of Pandora with a $5.50 target price. "While we expect Pandora to experience dramatic revenue growth from its current fiscal year through fiscal 2015," he only expects the company to generate $80 million in earnings before interest, taxes, depreciation and amortization in fiscal year 2015, he said.