• Research

Nov 3, 2017

S3 Analytics: Pandora Short Sellers Have Something to “STREAM” About!!

Pandora Media Shares plummeted this morning to a record low $5.37 (↓27.5%) this morning on a slew of analyst downgrades and a sobering outlook for the coming year.  Most troubling, are that the number of users actually shrank by 4 million and ad growth grew at an anemic 1% during the 3rd quarter – far below analyst expectations.  Pandora continues to struggle against competition from Spotify and Apple Music in the on-demand streaming services market.
 
Pandora short sellers are up $145.9 million in mark-to-market profits today.  S3 Partners real-time analytics calculates 70.8 million shares currently short with $ 380.3 million dollars at risk.  This is down 26% from an all-time, when it hit 95.9 million shares in mid-July.  With Pandora’s share price down 58% for the year, S3 estimates that bearish investors have made $452.2 million in mark-to-market profits since January.

New CEO, Roger Lynch, the 3rd Pandora CEO just this year, will have to confront a number of problems if he wants to turn this company around.  He is planning a “significant upgrade” to the company’s advertising technology, deemed to be “severely deficient”.  Lynch will also have his work cut out appeasing activist shareholders.  Both Jana Partners and Corvex Management have significant stakes in Pandora.  Back in 2016, Corvex urged management to explore a sale of the company.

Want deeper insight into the above analysis? Contact:
Brett.Weiss@S3Partners.net
Director, S3 Partners
The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC ('S3 Partners') to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks and merits, as well as the legal, tax, accounting and investment consequences, of such decision.


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