Pandora shares leap 62% on debut
Pandora, the streaming music website, has seen strong demand for its initial public offering despite concerns about the viability of its business model.
The company and its venture capital backers raised $235m on Tuesday by pricing the shares at $16. That compares with its projected range of $10 to $12, a spread higher than the original $7 to $9.
The pricing values Pandora at $2.6bn, or 19 times last year’s sales of $137m. That is much higher than most traded companies, but still below LinkedIn, the business social network, which debuted last month at more than 30 times last year’s sales...
“They probably can squeeze out more revenue per listener-hour, but it would nice to see that happen first before we put it in our 401(k)s,” said Espen Robak, president of Pluris Valuation Advisors.
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