Pandora IPO Too High?

PANDORA’S BOX: Pandora increased its IPO share price, which started at $7-9, to $10-12 last week, as analysts question the size of its market cap. BTIG’s stock expert Rich Greenfield recommends against a buy, citing the company’s “weak financial outlook.” Even though it expects to make $137 million in 2011, the company's expenses are rising as its listeners increase, meaning the site must pay higher royalties to the record labels. Pandora’s executive team are now holding off on forecasting a profit until 2014. BTIG pegs Pandora’s stock value at between $4 and $6, pointing to the fact mobile listening hours, comprising 60% of its streaming, cannibalize the higher-cost desktop hours. The site’s 34 million U.S. users are dwarfed by the 242 million regular radio listeners. (6/13p)