They come out and say they are lowering expectations and growth is expected to slow. They come out and say they are going to do a secondary offering and that will dilute the stock value. Apple comes on line STRONG with iTunes and signs up 11.7 million in the first week. Etc, etc, etc..
By all counts Pandora does not have a chance of surviving, much less being the streaming leader and the STOCK ... IT JUST GOES UP AND STAYS UP!!! Mind Boggling.
What am I missing!?!?!
You need to look a little deeper. The biggest hurdle for Pandora is not apple or slowing US growth. Their biggest hurdle is the royalty rate they pay for each song. And this rate is about to change. This stock is moving up because the market believes the rate will change favorably for Pandora.
Even if the rate does not change, Pandora could add to their revenue by say, selling mp3s from their app. They currently pay about 60% of revenue to royalties, but if they supplemented their revenue with say mp3s, their rate could fall as low as 25% of revenue. This is even if the rates do not change.
Most of the shorts do not want to talk about this because they are primarily interested in quick gains. If they are smart, they plan on being out before the court rules on the rate change.
"cult stock" a la TSLA; still relatively low float; Wall Street finessed the secondary at $25 so it has to hold that level until the shares are delivered and a bit beyond...or until some public event suggests APPL ITunes has created a definate ceiling on P ability to grow its top line....just keep in mind: P makes no money and is valued @ $5 billion.. A "random walk" down Wall Street will teach you that it is infinately corrupt and rarely "efficient"
Right now it is probably due to legal manipulation, i.e. green shoeing. Aside from that, there is a social networking bubble being inflated right now. Similar to 1999 internet bubble and 2007 clean energy bubble.
Impossible to know when the music is going to stop so just make sure you're near a chair when it does stop.
General bubble will pop, but not before Twitter IPO, meantime, timing has to be perfect on these or you have to send more$ to cover the calls in the meantime, will collapse by 50% from here all social media bs stocks. play is safe to buy the gap downs, no negative news brings it down much, you have to play and get these freebe from MM"s, no way if you get holding this overniggt and APPL releases news on Iradio switched users from P