Shares of Pandora Media’s IPO were set at $16 and jumped to $20 at opening this morning. Pandora claims 90 million users and says that they get a new one about every second, but the company has still not posted a profit. In this way, it is like many other technology start-ups queuing to go public.
Revenue hit almost $138 million for the company last year, but Pandora still posted a $1.8 million dollar loss. Pandora pays royalties on every song it streams free to users, and this has become the company’s biggest expense. While revenue doubled, so did royalty payouts, to the tune of $69.4 million.
Other big name tech stocks went public with a bang in recent months. LinkedIn, the professional networking site, started trading on May 19 and doubled over the course of the day.
And investors are holding their breath for the debut of Groupon, the darling of investors and venture capitalists who have already given the deals site over $1 billion. The site recorded losses of $450 million last year, mostly in marketing expenses.
Read More at The New York Times.