Pandora Slips To $13.26. Top Analyst Says Sell, Predicts Fall To $5.50
I'm not ready to give up on Pandora yet, but many investors and at least one top stock analyst certainly are. After rising into the low $20's on the day of its IPO, the stock fell back to around $18 at the the end of Wednesday. But the decline escalated on Thursday closing at $13.26. Some of the drop came after BTIG Research analyst Rich Greenfield began his tracking of Pandora with a Sell rating and a target price of $5.50.
Pandora's problems stem from its large fixed streaming costs, which just get higher the more popular it becomes. "Pandora is a great consumer music service, but its business model does not scale in the same way as other successful Internet businesses," wrote Greenfield.
Image via Yahoo Finance, where you can also track Pandora's current price.