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Pandora Crushes $30: What Happened, What's Next?

Stocks in this article: P

Video rant, point-by-point color and how to play the stock now on Page Two.

NEW YORK ( TheStreet) -- If I ran a financial media organization, including ones close to my heart such as TheStreet and CNBC, I would immediately place a moratorium on Wall Street analysts as guests.

Given how frequently these guys show up on myriad financial media properties that's an unpopular, even risky thing for me to say. But, I'm not here to "network" or make friends. I'm here to tell it like it is.

Ultimately, I would be more than happy to go with a very select approved list of Wall Street folks as guests. But, beyond that, I will never understand the inclination to depend on these guys, given that a) the investing public largely distrusts them; b) they're, generally, boring as hell and c) they build bull and bear cases and make buy or sell recommendations after a company's narrative has already become painfully obvious.

Case in point: How many Wall Street analysts, in January 2012, we're saying Pandora (P) Cracked the Code?

How many, during the same timeframe, were drilling into and demystifying the core that makes Pandora tick:

My Pandora bull case centers, as it has for months, on the company's ability to sell targeted, mutli-platform advertising at the national and local levels. Having worked closely with terrestrial radio sales departments over the years, I can tell you that they do their best work selling stations and individual shows that own the same and similar attributes as Pandora.
After you consider what Pandora can put into the hands of its growing sales force when it hits the street, it's easy to see how the gig should be like shooting fish in a barrel for just above-average salespeople, let alone good ones.

Even the Wall Street guys who deserve some credit, such as Doug Anmuth who raised his price target to $35 last week, present obvious cases far too reliant on quantitative metrics. I read his notes. And they don't sufficiently speak to the more important qualitative case investors need to know to better understand and make informed decisions on Pandora.

That's part of the problem on Wall Street, even when analysts get things right. They're mired in old models, while the rest of the world tends toward dealing with stocks on the basis of the "story." Focusing on the story -- or a company's narrative -- came into vogue somewhere in the past five years or so. And with good reason.

Who in the world would put money into so many of the market's top performers on the basis of numbers alone? Amazon.com (AMZN). Netflix (NFLX). There would be little, if any, demand for shares of these companies if we lived and died by the numbers. Investors buy the story. They buy the vision. And I don't blame them.

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