Pandora : drops 23.88% on 2nd day of trading

Pandora shares fall 23.88% after IPO rally. The Oakland, Calif.-based Internet radio service, the latest technology start-up to go public, is expected to continue to lose money over the next couple of years as it works to build up its business and revenue base, analysts say.

Pandora Media Inc., the Internet radio company, is valued almost as highly as traditional U.S. station owners combined even after its shares plummeted on their second day of trading.

The chart below compares Pandora’s capitalization as of yesterday with the total value of 10 radio-station operators.  The group includes CC Media Holdings Inc., the owner of Clear Channel Communications Inc., as well as Citadel Broadcasting Corp. and Cumulus Media Inc., Citadel’s would-be buyer.

Pandora, based in Oakland, California, had a market cap of $2.12 billion after tumbling 24 percent to $13.26 yesterday. The industry valuation was $2.23 billion.

“The issue with Pandora is: How far will it fall?” Francis Gaskins, president of IPODesktop.com, told Bloomberg Television yesterday in an interview. “I just don’t see a floor right now in that stock.” Rich Greenfield, an analyst at BTIG LLC, set a $5.50 estimate for the next 12 months when he started
coverage with a “sell” rating yesterday.
    

Beasley Broadcasting Group Inc., Emmis Communications Corp., Entercom Communications Corp., Radio One Inc., Saga Communications Inc., Salem Communications Corp. and Spanish Broadcasting System Inc. were included with CC Media, Citadel and Cumulus in calculating the industry’s value.
   

CBS Corp., whose radio unit generates less than 10 percent of the company’s revenue, and Sirius XM Radio Inc., a satellite broadcaster, were excluded. Their market values as of yesterday were $17 billion and $7.66 billion, respectively.