Pandora Media Inc (P) Still Faces Fundamental Obstacles

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On Tuesday, Pandora Media Inc (NYSE:P) announced that co-founder and current CEO Tim Westergren will be stepping down and vacating his seat on the board of directors. Westergren helped found the company 17 years ago and had only returned as CEO a little over a year ago.

Pandora Media Inc (P) Still Faces Fundamental Obstacles

Westergren was brought back to help Pandora compete with rival services like Spotify and Apple Inc.’s (NASDAQ:AAPL) Apple Music. The company made several changes — including revamping its $5 per month internet radio service and adding a new $10 per month on-demand music service — but at the end of March Pandora still had just 4.7 million paying subscribers compared to Spotify’s claims of 50 million.

Also leading to Westergren’s exit was Sirius XM Holdings Inc.’s (NASDAQ:SIRI) $480 million strategic investment in Pandora that was announced earlier this month. In exchange, the satellite radio operator will receive a 19% stake in the company and three seats on its board of directors — including the chairmanship.

But, will this shift give Pandora the breath of fresh air that it needs?

There is no doubt that mistakes were made under Westergren, but there are also fundamental issues at the company that must be contended with. I think the best outcome would be if Pandora was acquired by a larger business that could innovate it and use it in a vertical platform that generated more revenue.

P stock has traded very well recently, but because it has resistance around $9 (the black line) I suspect the current rally will run into some headwinds.

On the other hand, it’s worth keeping in mind that 34% of the float is short. Any real fundamental change at the company could send the shares soaring. However I’m not seeing any of those changes, yet.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/06/pandora-media-inc-p-still-faces-fundamental-obstacles/.

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