This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The 5 Dumbest Things on Wall Street This Week: March 9

Stocks in this article: OSTK C GS P

2. Pandora's Morrison Moment

Remember when Jim Morrison crooned "When the music's over, turn out the lights" back in 1967? Well, based on Pandora's (P) performance this week, maybe The Doors singer was offering stock advice from beyond the grave.

Hey! He was the Lizard King you know.

Shares of the Internet radio station were snakebitten Wednesday, falling 25%, after the company reported a wider-than-expected loss for its fiscal fourth quarter and offered even uglier guidance for the full year. Pandora reported a loss of 3 cents a share, on revenue of $81.3 million. Wall Street analysts, however, were anticipating a loss of 2 cents a share on revenue of $83.1 million.

And while that's bad, especially compared with the two surprise profits the company posted since going public last June at $16, it was really the company's full-year guidance that failed to light Wall Street's fire.

For the full fiscal year ending in January 2013, the company expects a non-GAAP loss of 11 to 16 cents a share on revenue of $410 million to $420 million. The current average estimate of analysts polled by Thomson Reuters is for a profit of a penny per share on revenue of $418.3 million.

And aside from the shellacking in the stock, it appears that "this is the end" -- to quote Jim again -- for the company's free pass from some of its friends on Wall Street. And by friends, we mean underwriters.

Citigroup's Mark Mahaney, for example, downgraded the shares to neutral from buy and cut his price target to $17 from $25, writing: "We initiated on Pandora with a Buy/High Risk last July with the stock at $18. That call clearly hasn't worked." Mahaney added that "with no profitability track record and no near-term profitable outlook -- Pandora always carried very little margin for error. And now there's error."

Other investment bankers, sorry, research analysts, like the ones from JP Morgan and Morgan Stanley slashed their price targets, but reiterated their overweight ratings on the stock based on the jump in the company's listener hours. In their views, monetization and profitability will eventually follow the music, but it's just going to take a little longer than they originally anticipated.

Sure guys. If that ridiculous reasoning gets you a spot in the secondary offering, then go for it. But as for us, you can just "cancel our subscription to the resurrection" of this stock because it's clearly not coming back.

As for Mr. Mojo Risin' ... well, he's another story.

4 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs