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Shares of Pandora Media (NYSE:P) jumped almost 15% Friday after an SEC filing revealed company CEO Brian McAndrews made a significant stock purchase this week.
Why it's happening
Specifically, the filing says that McAndrews on Wednesday bought 25,000 shares of Pandora at an average price of just over $18.58 per share, good for a total investment of nearly $465,000. If you're wondering why this is so significant, note it's the first open market purchase by any Pandora insider since shortly after the company's June 2011 IPO.
It also came shortly after Pandora stock hit a fresh 52-week-low on the heels of the company's largely positive third-quarter results, which were overshadowed by worries of decelerating growth in Pandora's monthly active listener base. But McAndrews chimed in during Pandora's subsequent conference call to suggest the market was wrong to focus so much on monthly active user growth, and pointed instead to the steadily increasing loyalty of those listeners as a better metric to gauge Pandora's success. In the end, it speaks volumes that McAndrews is willing to put his money where his mouth is.