Pandora Posting Strong Gain As Activist Investor Urges Sale

The Wall Street Journal: Pandora urged to sell by activist investor Corvex

Activist hedge fund Corvex Management is pressuring Pandora Media to explore a sale of the Oakland streaming music company.

"We have become increasingly concerned that the company may be pursuing a costly and uncertain business plan, without a thorough evaluation of all shareholder value-maximizing alternatives", Corvex Management, a hedge fund run by Keith Meister, said in a Monday letter to Pandora shareholders.

Corvex said it owns 8.3% of Pandora P, -1.19%, or about 9.95% including the effect of cash-settled swaps.

News of Corvex's letter sent Pandora's stock up more than 6 percent to close at $10.59.

Pandora is on the cusp of realizing an extraordinary vision: fundamentally changing the way listeners discover and enjoy music and the way artists build and sustain their careers. And ticketing does not seem to have moved the needle too much either; TechCrunch reported that last quarter, TicketFly brought in roughly $23 million in ticket sales, meaning it will have to sell a lot more tickets before it's going to justify the hefty price Pandora paid for the service.

"Simply put, we believe Pandora can become an even more differentiated product and a more valuable business as a part of a larger enterprise", Meister said. The statement assured that the company's senior management is in "constant dialogue with shareholders about our business strategy and committed to delivering results and long-term value". "We're confidently trading to capture the huge chance in front of us." the organization stated it's "in continuous conversation with investors about our company method and devoted to providing outcomes and long-term value". Its net loss of $45.2 million was better than the $71.4 million loss expected.

They added that there is likely to be "significant strategic interest in the company" from potential buyers including large media companies, phone makers, and other music companies.

For a possible sale, he estimated a price per share of Pandora stock "in the mid-teens", but kept a Neutral rating on the stock with a target price of $9.98.

Pandora did not immediately respond to a request for comment Monday regarding Corvex's letter.

Well, any honeymoon period that Tim Westergren might have expected when he started his second stint as Pandora Media's chief executive nearly two months ago has officially come to an end.

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