According to reports coming from the New York Times, Pandora is reportedly willing to listen to offers of acquisition.
Citing guidance from Morgan Stanley, the NY Times claims that the renowned music streaming company is at the moment in serious discussions over whether to position itself for acquisition or not. However, there is no potential buyer that has showed up or rather mentioned during the process.
If this happens to materialize, it will definitely be interesting stuff worth giving an ear. Pandora has not been doing amazingly well in the stock market, dropping 60% since October last year. However, the company has beaten the odds to capture the services of Rdio and Ticketfly, but the former is now shuttered.
When the company made the moves to acquire the Rdio technology and a way for it to directly sell tickets to users via Ticketfly, many thought that this was the beginning of the company’s best moments. This was actually meant to make the service feel more attractive to those who use it. However, if the latest reports are true, it could as well mean that Pandora was planning for the future.
A crucial time for Pandora
At the moment, Pandora’s shares yield a market value of $1.8 billion. This is a bit worrying since just two years ago, the service was valued at $7 billion. As noted earlier, the stock has dropped 60% since October 2015, yet the service still holds the largest number of music streaming lovers, standing at 81.1 million. On the other hand, Apple Music has recently hit 10 million subscribers.
Pandora is said to be spending a lot to attract more users to the streaming service but things are working out right. This is true because making money out of these users has become a problem for the company.
In the financial results the company announced on Thursday, it showed that Pandora managed revenue of $336 million in the just-concluded fourth quarter. However, $143 million of this money was spent on content acquisition costs, among them music licenses whereas another $112.6 million was directed to sales and marketing. As a result, the company ended up with a net loss of $19.4 million just for Q42015.
Pandora’s entire revenue in 2015 was an improvement from what the company managed in 2014. Last year it collected revenue worth $1.16 billion, which is up from 2014’s $921 million. Despite this, the company reported a net loss of $169.7 million in the same year, among them $58 million paid to settle a royalty dispute over music recordings that were made before 1972.
Officials from both Pandora and Morgan Stanley have remained silent about this possible acquisition plan.
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