According to a Form 4 filed with the Securities and Exchange Commission this week, Seymour Sy Kayfman and Michael Stark‘s Crosslink Capital disposed of 250,000 shares of Pandora Media Inc (NYSE:P), that it owned indirectly through its affiliated funds, at a weighted average price of $18.71. The current stake stands at 6.88 million shares (including the direct and indirect ownership). Previously, the fund reduced its holding in Pandora by 13% during the first three months of the year and then twice more in April by disposing of some 1.30 million shares and 262,000 shares that it held directly, while at the same time adding 345,000 shares to its direct ownership.
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Prior to co-founding Crosslink with Seymour Sy Kaufman, Michael Stark worked at Intel Corporation (NASDAQ:INTC) and at tech-focused investment bank Robertson Stephens. Thus it is no surprise that the technology sector represented 75% of the fund’s public equity portfolio at the end of March, with it having a market value of $698.76 million. The fund looks for investment opportunities in both early stage companies and well-established corporations, employing a mix of three strategies: venture capital, long/short hedge and hybrid crossover. Currently, Crosslink boasts 220 private investments including 72 seed investments. It has a total of 99 board seats in companies in its portfolio and has made 54 acquisitions.
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Although down by about 24.3% over the past year, Pandora Media Inc (NYSE:P)’s stock has appreciated by 4.2% so far in 2015. In comparison the radio broadcasting industry is up by 7.26% year-to-date. In its financial results for the first quarter, Pandora Media Inc (NYSE:P) reported a net loss per share of $0.12, which was $0.04 ahead of estimates and revenues of $230.76 million, which were also $6.2 million ahead of estimates. The monthly active users saw a 5% increase from March last year to 79.2 million with a 5% increase in hours per active user to 22.3 hours.
The royalty payments have been a major concern for Pandora Media Inc (NYSE:P). According to the company’s first quarter results, content acquisition costs stood at 54.6% of the company’s revenues. The most recent blow to the company over performance royalties came after a New York rate court ruled in favor of BMI, the company offering blanket music licenses to songwriters, composers and publishers. The decision hikes Pandora’s royalty payments to BMI to 2.5% of revenue, up from an earlier 1.75%. However, Pandora Media Inc (NYSE:P) will appeal the verdict to a court which allowed it to maintain its 1.85% royalty rate to ASCAP recently.
Another recent development in Pandora Media Inc (NYSE:P)’s camp is the company’s decision to acquire Next Big Sound for an undisclosed sum. It is believed that Pandora’s Artist marketing platform, which helps artists by providing them with data on listener activity, will benefit a great deal from this acquisition. Moreover, the U.S Federal Communications Commission recently allowed Pandora Media Inc (NYSE:P) to exceed the 25% foreign ownership benchmark pertaining to its acquisition of the South Dakota radio station KXMZ FM, valued at $600,000.
Among over 700 hedge funds that we track at Insider Monkey, the interest in Pandora Media Inc (NYSE:P) has declined early this year, as a total of 37 funds had an aggregate investment of $752.05 million at the end of March as opposed to 43 firms with $909.78 million invested at the end of 2014. Ricky Sandler‘s Eminence Capital and Ken Griffin‘s renowned managed futures fund Citadel Investment Group are two other prominent stockholders of Pandora Media Inc (NYSE:P) with stakes of 7.89 million shares valued at $127.89 million and 3.24 million shares valued at $52.58 million respectively.
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