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
TheStreet Open House

Absolutely Horrible News For Pandora

Stocks in this article: P

NEW YORK ( TheStreet) -- Pandora (P - Get Report) needs a plan B ... badly.

If I was advising the company, here's what I would tell it do ... yesterday (!):

  • Backtrack on the Internet Radio Fairness Act considerably.
  • Push the annual subscription option, but find some way to incentivize it.
  • Cultivate additional revenue streams immediately.

I've got to be 100% honest here.

I feel awful about writing this article.

After having had the chance to meet Pandora co-founder Tim Westergren in person and on the phone over the last year, I came to admire the guy even more than I did before we connected. He's an incredibly bright visionary and one hell of a person to boot.

I have come to know a small handful of people at Pandora. Again, all excellent folks. But I have got to call it like I see it. I can't keep quiet just because I like an individual or a group of people.

Quite frankly, outside of Netflix (NFLX - Get Report), I have not seen a company take a more abrupt turn for the worse in a long time.

Most negative turns develop over time. Think Research in Motion (RIMM), Microsoft (MSFT) and what we might be witnessing with Intel (INTC - Get Report).

In these typical cases, you look in the rearview mirror and point to a historical signpost where a decline began and intensified to a point where it would have taken a Herculean effort to prevent a hard landing.

That's what happened at RIM. That's what happening at Microsoft. And that's what might be happening at Intel.

While you can't call Pandora a company in decline -- it continues to show consistent and impressive growth in almost every key metric -- you can certainly liken it to a company in peril from a strategic standpoint.

I cover what ends up Part One of this somewhat bearish case in Is Pandora Panicking? Should Investors from mid-October.

At that point, I maintained a long-term bullish stance.

Now, I simply cannot be a bull unless Pandora makes profound changes to its approach in the fight over music royalties.

Here's why I am worried.

On Thursday, a large collection of musicians -- about 125 of them -- signed an open letter to Pandora opposing the Internet Radio Fairness Act.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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 17,242.73 -144.48 -0.83%
S&P 500 2,015.22 -14.33 -0.71%
NASDAQ 4,667.5230 -13.9740 -0.30%

Partners Compare Online Brokers

Free Reports

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