I believe $1.80 and lower as a relatively safe buy zone and over $1.97 as a good exit price.
In my article, "Time to Turn Dial From Sirius to Pandora" last week I suggested investors should rotate out of Sirius and into Pandora (P), and as of the time of writing proved correct. Pandora moved up in price by over 10% and Sirius down 10%. Hopefully the article provided food for thought to those with an interest in either company.
Pandora may not draw the excitement and buzz Friday's Facebook IPO created, but maybe it should. Pandora appears ready to ramp up its monetization of mobile and desktop services.
Facebook on the other hand is playing catch-up in mobile while at the same time losing General Motors (GM) as an advertiser. Keep in mind GM is not leaving Facebook, but is simply cutting the direct ad budget for Facebook.GM will continue to enjoy (on Facebook's dime) having multitude of pages displaying products. If Facebook is able to monetize the pages with ads from others, something I believe they will do, it will still not make up for the GM revenue loss. If others determine free pages are enough exposure (especially in relation to the cost of ads) the massively lofty projected price to earnings multiple of 65+ may soon appear absurd. Lesson here, the safe investor money will avoid Facebook and not believe the hype. For Pandora, given the share price increase of over 10% in a week, I would scale back and hold out for a price pullback into the $9 range. While I love the service and buy into the long-term prospects of Pandora, the company still needs to put up a couple of solid quarters to maintain it on my buy list.
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