Pandora IPO story updated with closing share price information.
But while the stock hit $26 at one point during morning trading -- which valued the company at more than $4 billion -- shares later fell to close at $17.42. The company raised $235 million in its IPO Tuesday, selling shares at $16 a piece.
Last week Pandora increased its price to between $10 and $12, up from its prior range of $7 to $9 a share.Pandora's IPO comes in the footsteps of other recent Internet IPO successes including LinkedIn (LNKD - Get Report), which saw shares more than double in its first day of trading, and Yandex (YNDX), the Russian Internet search shop that saw its stock jump more than 40% on its U.S. trading debut. Pandora IPO Pressures Sirius Shares While Pandora has posted significant growth and a rapidly expanding user base -- it comprises about half the Internet radio market -- it faces losses and mounting competition from tech powerhouses like Apple (AAPL - Get Report), Google (GOOG) and Amazon (AMZN - Get Report), who are also breaking into the online music space. Pandora lets listeners create personalized radio stations based on their tastes. Listeners can then provide feedback by selecting "thumbs up" or "thumbs down" to influence the types of songs that are played going forward. The service is available for free through the Web, tablets and smartphones and is also integrated into the sound systems of several car makers. The company's iPad app is the most downloaded free app in the history of Apple's App Store and its iPhone app is the second-most popular, following Facebook. Pandora generates about 87% of its revenue from display and audio ads. However, users can buy a subscription to the service to bypass ads. Founded in 2000 by Tim Westergren, Pandora has suffered several near-death experiences since its inception including impacts of the dot-com bust, near-bankruptcy and lawsuits from the recording industry. But despite the company's popularity -- it boasts more than 90 million users, up from 80 million in January -- it has never turned a profit. "They control 50% of the Internet radio market, but they can't make money on a continuing, sustaining basis," Francis Gaskins, president of IPO Desktop, told TheStreet. "What will happen with Pandora is it will open