Online radio company Pandora Media (NYSE:P) shocked many tech investors earlier this week when it announced that it plans to raise some serious capital.
And while oftentimes investors treat such dilution with the utmost contempt, the market reacted quite the opposite way. In fact, Pandora's shares soared nearly 5% higher in the trading session following the announcement. This is undeniably a shrewd move on management's part by capitalizing on Pandora's sky-high share price. However the business is also facing a series of looming risks that would have many investors shaking in their boots. In this video, Fool contributor Andrew Tonner breaks down Pandora's announcement and why it might not prove as delightful as investors initially thought.
Fool contributor Andrew Tonner owns shares of Apple. Follow Andrew and all his writing on Twitter at @AndrewTonner. The Motley Fool recommends Apple and Pandora Media. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.