Internet radio company Pandora Media Inc (NYSE:P) has gone public today. Pandora priced their shares at $16. Pandora opened at $20 and jumped to $26. This is an increase of over 60%.
At the point of mid-day trading, Pandora fell below $20. Pandora is currently losing money, but they raised $235 million with the $16 offering price. At the time of the offering, Pandora was valued at $2.6 billion. Morgan Stanley, J.P. Morgan Chase, and Citigroup were the lead underwriters of the IPO.
Pandora hit about 90 million listeners at the end of April. Pandora lost about $1.8 million on revenues of $138 million last year. Pandora is expecting operating losses throughout the fiscal year of 2012. Pandora allows users to create custom music stations by indicating what their favorite songs are and who their favorite artists are.
Pandora makes most of their revenues from advertising on their website. They also generate revenue by offering premium accounts for a cost. The subscription revenues are less than 10% of sales. Pandora offer 9% of their shares outstanding to the public. This is a relatively small amount.