There has been widespread speculation about a potential acquisition of Pandora (P) by SiriusXM in recent weeks, particularly following Pandora’s announcement of an investment by KKR that includes a 30 day period prior to the investment for Pandora to seek a transaction. There are a number of ways that acquiring Pandora could improve the long-term value of the SiriusXM platform, including better monetization of the existing Pandora business, and improving the in-car product offering, particularly in vehicles with the new 360L radios being deployed starting this year. We continue to find the SIRI business attractive, and would look at Liberty SiriusXM (LSXMA) as the best vehicle to generate exposure, as the discount, at 15%, remains relatively wide. While SIRI’s management has generally expressed skepticism about the value of acquiring Pandora, Liberty management (and particularly CEO Greg Maffei) have been more positive (e.g. Barrons 3/7). While this, to some degree, represents a somewhat different view, there is also likely an element of “good cop/bad cop” going on, with SIRI management sounding more skeptical in order not to create high expectations. As we see Liberty (SIRI’s controlling shareholder) as viewing themselves as a permanent SIRI holder (and don’t believe they’re looking to spin and divest, as they did with DIRECTV), we believe they would be willing to accept some near-term financial dilution to improve the long-term value of the business. Overall, we believe that a deal is certainly possible. We don’t view Pandora as a “must-do” deal for SIRI, however, as many of the benefits that buying Pandora could bring are either not critical to SIRI’s mission or could be created internally, potentially at higher cost. As we also are skeptical there are a large number of other bidders out there, we believe that Liberty and SiriusXM can afford to be patient. It’s worth noting that Pandora shares are at the cheapest levels relative to SIRI shares that we’ve seen in the past two years, providing SIRI with a potentially strong currency (see figure 7).
On the logo dispute with PayPal. They logos are quite different. If I were a juror, I'd side with Pandora and make PayPal pay for everything plus penalties to boot. This is thoroughly ridiculous. Different color pattern, reverse and one "P" instead of two. If someone gets confused is because they weren't paying attention. That's not Pandora's fault. With millions of companies worldwide there wouldn't be enough room for everyone to have a logo if such claims are allowed to stand.
What makes me sleep well at night...... 1) Steven Cohen, a billionaire hedge fund manager recently purchased 12,558,972 shares (5.4%) of Pandora at a average cost higher then where we are now. 2) KKR see's value in Pandora so much so that they will invest 150,000,000 with an option to invest more at a future date. These are preferred shares convertible at $13.25. KKR will receive a "thanks but no thanks fee" of 15 mil in the likely hood that someone else recognizes this value and buys Pandora 3) Matrix and Corvex wants Pandora sold! 4) Greg Maffei CEO of Liberty last year made a informal offer to Pandora of 15.00 per share which was rejected by Tim Westergren. NOW Maffei and the media wants us to believe that Maffei believes that Pandora is only worth 10 dollars a share. This is nonsense. Its like asking the prettiest girl in school to the prom and she rejects you in front of everyone. Then you turn to her and says "You are ugly anyway" 5) Morgan Stanley and Centerview are working with Pandora to consider offers. Do you really think they were put in place to sit by the phone waiting for 1 suitor, Liberty to call.
Pandora has 76.7 million subscribers! Yes they dropped the ball and users are declining by a few mil but still 76.7 million users! AND name recognition. I believe Sirius will make an offer between the 12-13 dollar share that the NY Post reported and we might be surprised by another interested party. That pretty girl at the prom is not as pretty anymore and is now looking for a date. Sirius also realizes that they need Pandora. The landscape is filled with competitors. Hooking your iPhone to your car is scaring the crap out of Sirius radio
Finally, I do not concern myself with the swings during the trading day. All must remember 30% of the float is short. What we see is shorts averaging there shorts down then covering. This is why we see wild swings. Put pressure on the stock on any rally then as people panic and sell stock drops to day lows and shorts cover. ,50 cents here and there and liquid are a shorters dream. A little on my conspiracy theory......Dave Faber is a dk. Many on the street are short P and shorters are sophisticated and well connected people. Faber and CNBC helps keep a lid on this for them. Watch in two weeks if P is taken over they will be like wow we didn't see this coming BS. Been a trader/broker since the 80's and I see this all the time. I refer all to DNDN.
Anyway......good look all. Stay Long and strong! And if a takeover does not happen we are in bed with Cohen, KKR and with there money our girl will get a face lift and some implants and we will be sexy as hell soon enough!
Nice right up on seeking alpha talking about SiriXM using their stock to buy Pandora and a sense of urgency to move now. Take a look and see what your take is. Good
SIRI presents tomorrow at JPM conference...
Is the cup half full or half empty.....depends if I'm drinking or pouring.Lets keep this real. No one buys a stock then goes on a message board and trashes said investment while still long. I have seen this pattern on many boards and its comical. The wolfs tail is sticking out of the sheep's outfit.Lets break this down to the facts and only the facts.....1) KKR invests 150 million into Pandora with a conversion price of 13.25 price. Dilution or confidence?2) Steve Cohen, a hedge fund manager legend takes a 5.4% stake in Pandora. Strategic investment or #$%$ shoot?3) Analysts that downgraded stock still have target price North of where we sit now. Not 1 downgraded to sell.4) Westergren has stated that he is confident that he can have this company sold in 30 days and structured the KKR deal to make room for a sale5) Matrix and Corvex wants Pandora sold! 6) Morgan Stanley and Centerview are working with Pandora to consider offers7) 30% of float is short. 8) Liberty previously made an offer to buy Pandora at 15.00 a share9) Pandora has name recognition and 76.7 million subscribers.These are the facts and I can argue that even without a takeover stock in undervalued. Many analysts see the company showing a profit by yearend.
15 days or less. Anyone holding their breath?
I think a buyer comes out of left field (Apple) and buys them for $15+. 81 mill users is of great value for the right company. Silicon Valley valley tech companies have a very different mentality to acquisitions than traditional media companies. They will pay a premium in a heartbeat if they see an untapped scaling opportunity. I believe pandora falls into this category for the right company.
A lot of positive comments have been made about KKR but I see that as not a good sign for the average investor. "Private equity firm KKR has agreed to buy $150 million in Series A preferred Pandora shares a month from now and be paid a 7.5 percent or 8 percent quarterly dividend while KKR’s Richard Sarnoff takes a board seat." KKR's investment is good for them - a return of 7.5% per the dividend and bad for the average investor from the stock being diluted. With additional dilution further down the road. KKR has an average time period of 5 years for helping companies turn around. Being an active investor I rarely hold a stock longer than 13 months. This only means that - if the company doesn't get sold in 30 days the price will definitely drop due to several reasons: investors will bail, stock will be diluted, debt structure is still not under control, cash burn rate has only increased the last two years and no comment on how to get that under control, etc. I'm still an investor but RISK must be recognized.
Observation about Pandora stock. I invested in this stock when CNBC indicated that Pandora was very obtimistic that they could sell the company within 30 days AND the stock hit a 52 week low (at that time). My cost basis is 9.40 I've done good on other M&A transactions but this one is a lot trickier than it looks. Here are the main problems as I see them currently: 1) Tim Westergren is the main problem. He is no Steve Jobs and he no Jeff Bezos. So he wants to do things his way (Steve Jobs) but his way hasn't worked and he doesn't care about the debt situation as he should (Jeff Bezos) but he doesn't have a product like Amazon and had run the value of the company continually lower. AND he doesn't want the company to be sold - big problem when you are trying to find other suitors - and he will continue to make arguments that the asking price is too low because he believes Pandora is worth more for its' potential than the actual data; 2) KKR - if a sale is not made KKR's arrangement will dilute the stock and the stock will go down - probably in the 8s maybe lower to the 7s. 3) With more debt or more dilution of stock this company will have a long road of fighting back to the current lows. Not sure if I will exit my positions or buy puts to minimize any potential catastrophe. But, I have found that situations like this can always get worse. Just some thoughts.
19 days and counting
The Company is getting cash for Pref shares that convert to common shares at a price of $13.25. While KKR waits they get paid interest of 7.5% in cash or 8% in more stock. Company gets $150,000.00 dollars and can ask for another $100,000.00.
Buffett and friends buy more LSXMA/ LSXMC shares the last 3 trading days. Does this complete their purchases?
Fact: INSIDERS have been selling off their shares regularly this year.
I'll believe it when this actually happens Otherwise another pump n dump?? Be careful they want u to add more shares n then dump. Just give us the actual deal news!!
what do you guys think about the PayPal lawsuit over the pandora logo
I did my part today, I subscribed to the premium membership. Now they have 78 million and 1 subscribers. It has good content, give it a try...
How slimy is Macquarie they cut P to neutral from outperform knowing a possible deal is in the works for possibly a price between $12-$13 this is so they can load up at lower levels. Wall Street is so corrupt.
The deal makes sense and will happen even if its for 10 bucks, P is out of options and the money injection won't go very far and they know it. The only way P survives is with an organization that can cross sell ads for the free users and for them it makes sense because Howard Stern will leave in a couple of years and they need more subs.
Hope we get s final MA news asap May be tomorrow morning? Hopefully 15$