This Day On The Street
Continue to site right-arrow
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!

Pandora's Absolutely Not Screwed; It's In the Driver's Seat

Stocks in this article: P AAPL

NEW YORK ( TheStreet) -- I read two articles about Pandora (P) over the weekend that stuck with me. One for how mind-numbingly horrible it is. Another because it provided a rare occasion where a writer actually presents a real understanding of not only what Pandora does, but the direction Internet radio heads.

A couple blokes put together a piece for Motley Fool centered around two completely asinine -- and plainly false -- ideas:

  • Pandora "has no intellectual property, leaving its business ripe for disruption"; and
  • Music listeners love Pandora, but it "has few supporters on Wall Street."

Second absurdity first. "Music fans" and "millions of devotees" have not run the price of Pandora stock up 97% since it hit mid-November lows. That would be Wall Street, thanks in large part to the emergence of a better understanding of exactly why the company, despite senseless noise, runs near the front of the mobile advertising revolution and will continue to not only lead Internet radio and disrupt terrestrial.

First absurdity second. Pandora's business has been "ripe for disruption" for years. Competitor after competitor has come in and done absolutely nothing to slow Pandora's growth. In fact, the growth has never stalled. In terms of listener hours and revenue, particularly on mobile, the company is as healthy as it has ever been. Don't expect that trend to reverse, even if Apple (AAPL) hits the market with an iRadio product.

Pandora's most important piece of intellectual property -- the Music Genome Project -- sets it apart. In this video conversation, Pandora Co-Founder and Chief Strategy Office Tim Westergren traces the history of how the MGP spawned Pandora and gives it its massive edge today:

I feel like I have to hold people down, rough them up and threaten the safety of their families to get them to sit still long enough to comprehend the impact of the MGP. You don't just walk in and, overnight, disrupt the advantage the MGP gives Pandora in the areas of personalization and discovery or the head start it has building out sales infrastructure to gobble up an ever-increasing chunk of traditional radio's $14 billion to $16 billion advertising market. Not if you're Apple, not if you're Spotify. Pandora's continued growth and the growing number of entrants attempting to snag a piece of it only validates the company's model.

1 of 2

Select the service that is right for you!

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!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • 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