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Pandora Earnings (Maybe) Beat Estimates

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Oakland, Calif.-based Pandora Media (NYSE: P  ) shares are in freefall in after-hours trading Thursday, down more than 5% following an earnings report that showed the Internet radio company beating analyst estimates for revenue and either beating or missing on earnings (depending on how you view the estimates).

Revenue in the fiscal second quarter grew 58% in comparison to last year's Q2, to $162 million. "Earnings" -- which were actually losses -- amounted to $0.04 lost per share. Analysts had forecasted a $0.02-per share profit, which target the company failed to hit under generally accepted accounting principles (GAAP) but exceeded under a non-GAAP, pro forma rubric. In its statement, management claimed that non-GAAP profits were $0.04 per share and thus ahead of estimates.

Cash burn swelled during the quarter, rising to $8.5 million for the past three months, as compared to a modestly positive free cash flow figure one year ago.

On other metrics, Pandora performed strongly, as it usually does. Pro forma revenue from services delivered over mobile devices grew 92%, active users increased 30%, total listener hours were up 18%, and market share among radio listeners of all types climbed 106 basis points to 7.08%.


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  • Report this Comment On August 23, 2013, at 12:44 AM, EllenBrandtPhD wrote:

    As far as I can see, there are really only 3 or 4 relevant points, which everyone is missing, as the Short Side screams loudly and the Long Side is probably preparing its own Media Blitz for tomorrow morning, including appearances by the CEO on the three Bubblevisions.

    First of all - the only one that's company, not stock: Expanding the hours back to unlimited occurs in exactly 5 trading days, I believe it is, so next quarter and subsequent quarter those hours stats should literally soar back. There will also probably be lots of Propaganda surrounding this move.

    And the three points that are "stock," not company:

    *** The only analysts who count are those who were wishy-washy or neutral before earnings. Those who hate P will still hate P. Those who are Uber-Bullish have no reason to be less Uber-Bullish.

    For the analysts in the middle, then, are these results any reason to Cut, Keep, or Raise your rating? Cut, I don't think so. Raise, Yes, some. Most analysts at Hold will probably stay pat at Hold, so overall, net Bullish, if slightly.

    *** The Short position is still humongous. And given where we are in the Market in general, if you were a Short looking for opportunities, would you rather tie up your buying power here, with these results, or try for a much bigger bang in, say, one of the bigger volume higher flyers, which always have the most to fall, in case there is a further general Market meltdown? (Window could be limited, too, since general Market may bounce back hard in October.)

    I don't like to Short, so getting into their heads is not my thing. But it does seem to me that you might want to forego further action on your Short here following these results and move your money where it might be much faster and much more strategically used.

    I DO think that is what most Shorts were thinking earlier tonight. I'd bet those crazy moves reflected some serious, dedicated Short covering.

    *** And still most important, to my way of thinking, is this:

    % of Shares Held by All Insider and 5% Owners: 4%

    % of Shares Held by Institutional & Mutual Fund Owners: 101%

    % of Float Held by Institutional & Mutual Fund Owners: 105%

    Number of Institutions Holding Shares: 180

    This one is still in the hands of its original big banks and funds, way too tightly held.

    They dearly want to bring in the next tier of institutional supporters, pension funds, money managers, mutal funds, and the like.

    To do this, they have to keep up a very Bullish flow of commentary on the company and its prospects. They have lately been hinting pretty strongly that P is a possibly near-term acquisition target, since what it has already built is very expensive to build from scratch. (THAT, by the way, is the "valuation," just as it once was for Google and now is for Facebook.)

    *** The above is the answer to all the anti-Goldman rhetoric on the Yahoo and other message boards, by the way. Yes, it was the Goldman analyst who was most Bullish - and RIGHT about most things. And Goldman did sell 30 percent or so of its original holdings from the offering last quarter. But, since there is an entire Universe of smaller funds and other Institutions which trade through and with Goldman, that 30 percent of the holdings at the IPO probably went to them.

    In other words, Goldman may just have been more successful than the other original holders in offloading some of their shares to second-tier Institutions, which is what everyone wants to do.

    So the stock is going to be in Distribution for quite awhile, not Accumulation.

    As traders know, the Accumulation phase is actually Bearish. The Distribution phase is Bullish, epsecially if the Distributors are top-tier and aggressive, which this particular group of Distributors undoubtedly is.

    So let us see what they come out with on the Bullish Propaganda side tomorrow morning. The Bears have already spoken loudly and said absolutely not one thing that's new!

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