Trade of the Day: Pandora Media Inc (NYSE:P)

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Today, we’re opening a new bearish trade on Pandora (P). Despite the fact that P hasn’t been able to show how they can make money in the long-run, there may be a long-term model in the space that they operate. However, that is contingent on companies like Apple (AAPL) and Amazon (AMZN) not getting more serious about competing with Pandora in the near term. Either way, we don’t expect P to be able to maintain current valuations considering its risks. We think trends amongst younger media-consumers and the threat of increased competition will keep investors in a selling mood this quarter.

A downgrade by Bank of America Merrill Lynch analysts on Monday, along with a completed “double top” pattern, indicates additional downside potential before earnings are released next week. We like the potential for a short-term play to the downside as investors try to reduce risk before the actual earnings release.

Buy to open the P November 18th $12 Puts (P161118P00012000) at current levels.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/10/trade-day-pandora-media-inc-nyse-p/.

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