One of this young year's biggest losers has been Pandora Media (P). Shares of the music streaming pioneer have surrendered 33% of their value through the first quarter of 2016, tumbling 18% last week alone.
The stock has taken a dive despite several short-lived spikes in recent weeks whenever buyout speculation creeps into the market's narrative. One can only imagine how bad things would be if the buzz about a potential takeover wasn't in the air.
Last week's drop was initially triggered by the abrupt departure of Brian McAndrews as CEO on Monday. He is being replaced by co-founder Tim Westergren. There were other organizational changes, but the one that left the market scratching its head is why Westergren -- who at one time served as Pandora's CEO -- was back at the helm.
The move also fueled concerns that a possible buyout is no longer in the cards. After all, if Pandora was talking to suitors would McAndrews really leave now instead of waiting to get cashed out at a premium?
Two days after McAndrews' surprising departure, Mizuho initiated coverage with an uninspiring neutral rating. His $10 price target is also lower than where Pandora stock was when the week began, though last week's tumble into the single digits changes that.
Reports later in the week claimed that Pandora rival Spotify is wrapping up a financing round where it will raise $1 billion. That's a lot of money. It's roughly half of Pandora's market cap.
The competitive climate is intensifying, and not just because Spotify is arming itself with dough. Tech giants with far more money than Spotify just raised, or Pandora has, have put more muscle into their platforms. The launch of YouTube Red and growing popularity of Amazon.com's (AMZN 4.03%) Prime find two of country's biggest tech companies making it easier to stream tunes at no additional cost. Then there's Apple (AAPL 2.32%). The top dog in digital music downloads has been slow to migrate to streaming, but Apple is doing its best to make up for lost time. The launch of Apple Music has catapulted the consumer tech behemoth into legitimacy, topping 10 million premium subscribers just months after its launch.
It's probably not a surprise that Pandora's popularity has stalled with Apple's arrival. Last year was the first time in Pandora's history that it lost more users than it gained, going from 81.5 million active listeners at the end of 2014 to 81.1 million at the end of 2015.
However, these active listeners are tuning in for longer stretches of time. Advertisers are also paying a lot more to reach them. Apple Music and Pandora will continue to drum up paying subscribers, and more YouTube Red and Prime subscribers will start to take advantage of the included streaming content that's available. However, Pandora's still the leader here. That's worth something, even if it won't be worth something in a buyout later this year.