Pandora Announces Plans To Sell 10 Million New Shares
September 17, 2013
Pandora has announced a new, underwritten public offering of 10 millions shares of its common stock, valued at $230.8 million. The popular music service plans to use the proceeds to invest back into the company, for "general corporate purposes, including working capital and capital expenditures." In addition, Pandora says it could use a portion of the net proceeds for "potential acquisitions of businesses, products or technologies." The company notes that it will not receive any proceeds from the sale of these shares.
An additional four million shares will be offered by Crosslink Capital Inc. In addition, Pandora intends to grant the underwriters, led by JP Morgan and Morgan Stanley, a 30-day option to purchase up to an additional 2.1 million shares to cover over-allotments, if any.
CNet reports that Pandora also said in a filing to the SEC that "rapid growth in both listener hours and advertising revenue" is something the company does not "expect to be able to sustain" going forward. Pandora also told the SEC it expects continue to post annual losses in the near future.
The news was announced late Monday, and Wall Street was unimpressed, as after-hours trading saw Pandora's shares fall by approximately four percent. As of 9:30 a.m. ET, Pandora stock was trading at $23.24 each.