6. Pandora Media
Pandora Media is responsible for Pandora Radio, an Internet music radio service available in the US. In 2010, thanks to the popularity of the service, Pandora Media was touted as one of the hottest tech companies. To capitalize on its new found glory, Pandora Media decided to float more than 14.5 million shares at $16 per share to raise $235 million.
Pandora Media's shares were listed considerably higher on the day of the IPO but the value dropped quickly. Within two days of trading, the shares dropped to a low of below $13. Analysts quickly blamed the intensifying competition and growing royalty fees for the company's bleak showing. Since then, although Pandora Media's shares have sporadically exceeded the IPO price, the performance has been disappointing. It is currently being traded at about $10, a 50% drop from the IPO price.
While it may look like a company with the name Skullcandy has no place in the stock market, in July 2011 the popular audio accessory manufacturer did in fact launch an IPO with a share price of $20.
The shares prices didn't really gather any steam and plateaued at the IPO price itself on the first day. For the next couple of months, the shares hovered around the $17-$19 mark and by the time 2012 rolled in, it had dropped below $13 and till date continues to trade at around the level.
Analysts pointed out that the weak performance could be explained by the fact that since the company's products have "cult" status and are endorsed by musicians such as Jay-Z and Snoop Dogg, they could be facing negative public opinion for going "mainstream."
Which makes it, perhaps, the best explanation I've read for a damp squib of an IPO.
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