OAKLAND, CA (CelebrityAccess) — Pandora Media, the largest Internet radio service, has conducted preliminary negotiations with an eye towards selling the company.
According to the New York Times, Pandora is working with financial services company Morgan Stanley to meet with potential buyers. Sources told The Times that the talks were in the preliminary stages and may not lead to a sale.
A decision to sell the company comes at an inauspicious time for publicly-traded Pandora, which has seen its market value drop to $1.8 billion, down from more than $7 billion two years ago. In just three months, the company's stock is off by more than 60%.
While Pandora boasts the largest number of users for a music streaming service, competition in the sector is fierce, with rival Spotify boasting a fresh infusion of 500 million in capital.
Pandora's userbase has waned as well, falling to approximately 81 million users at the end of 2015, from a peak of 81.5 million the previous year. However, the year end figure for 2015 was up slightly from earlier in the year, when the company's active users were down to about 78 million at the end of the third quarter, perhaps reflecting the launch and free trial period of Apple's streaming music service.
Pandora on Thursday announced a net loss of $19.4 million on $336 million in revenue in the fourth quarter, citing “content acquisition costs,” which includes music licenses as a driver of the loss. For the year, Pandora post revenue of $1.16 billion, up from 921 million the previous year, but still in the red to the tuen of $169.7 million, which included $111.6 million in stock-based compensation and nearly $58 million to settle a lawsuit with the RIAA over royalty for pre-1972 recordings. – Staff Writers