Boston, MA 08/13/2014 (wallstreetpr) – Pandora Media Inc (NYSE:P), an Internet radio provider boasting almost $5.3 billion in market cap, saw its shares facing south 2.58% to $25.70 in the regular session and lost another 0.19% in the post-market trading. All that happened while silence replaced the excitement that investors had earlier in the day when takeover rumors hit the market. However, the buyout talks, which also pointed to Yahoo! Inc. (NASDAQ:YHOO) had a short-lived impact as no further details could be obtained.
It was rumored that the struggling global technology company Yahoo! Inc (YHOO),whose shares also closed in the red in the last session (-0.75% to $35.52) was considering Pandora Media Inc (NYSE:P) buyout as an extension of its loose acquisition purse. As Bidnessetc reported in an article, the rumors had their source at news site Zero Hedge.
Buyout headache
Some of the issues that poured cold water in the Pandora Media Inc (NYSE:P) takeover rumors included the company’s market value at more than $5.2 billion and Yahoo’s cash position of $2.7 billion. That not only made the rumors look farfetched, but also meant that Yahoo needed to sink deep into debts to support such a move, something that CEO Merissa Mayer doesn’t seem to favor going by her moves in recent times.
Yahoo! Inc (YHOO) is making small startup acquisitions from its own cash and its focus appear to be on businesses that can add content value to their side as they seek a bigger share of the online ad revenue.
Content issue
Pandora Media Inc (NYSE:P) makes most of its revenue from ads on its free Internet radio service, but also generates a small amount of its revenue from subscription for ad-free radio service. However, even for Pandora, content remains one of its major challenges such that it is not compatible with the thesis at Yahoo.
New battlefield
In the radio service business, Pandora Media Inc (NYSE:P) competes with legacy radio stations and satellite radio provider Sirius XM Holdings Inc. (NASDAQ:SIRI). Their new battlefield is in automobile where they are partnering with selected automakers to fit their technology in new cars.
