Pandora Media Inc (NYSE:P) shares retreated almost 3% on Thursday after the New York Post reported that the music streamer has been in talks with PE firms KKR, Silver Lake, Providence Equity Partners, and others to raise cash (according to the Post’s sources). Pandora is considering raising capital in part to pay substantial music royalties to various music labels and in part to expand its offerings. If Pandora Media Inc (NYSE:P) were to raise money, it would presumably raise it at a discount to current market prices, hence why some traders may have sold today. In addition, Pandora has been talking with various labels about a potential equity stake. Given that many of the labels own rival Spotify, some may be a little reluctant.
Pandora considering raising cash does not preclude a sale, however. According to the Post, its sources say the ‘door is still open and talks about a strategic investment are happening in tandem’.
What Does The Smart Money Sentiment Say?
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The smart money was bullish on Pandora in the fourth quarter. According to our records, 58 elite funds (out of the 742 top funds we track) owned $1.47 billion of Pandora Media Inc (NYSE:P) and accounted for 48.40% of the float on December 31, versus 50 funds and $1.54 billion respectively on September 30.
The Bottom Line
Pandora Media Inc (NYSE:P) shares fell on Thursday due to a New York Post story. For those of you interested, read next ‘11 Best Smartphones For Music Lovers‘.