The leveling off of growth coupled with increased advertising revenue (Pandora just recorded its first $100 million mobile as sales quarter) and content costs eating up a smaller percentage of revenue ... it's a dynamic you have to bring into any conversation you have about Pandora, whether in 2011 or today. Without it -- and a discussion of how Pandora generates advertising revenue and how that will continue to change and mature over time -- you have nothing but an ignorant, if not intellectually negligent short case.
I outline what lies ahead for Pandora, clearly, in no uncertain terms in the above-linked article. Step-by-step, point-by-point using a look back and a peek forward, all steeped in what has become years of research and hours of conversation with people from all levels within Pandora and throughout Internet radio/the music industry.
It's called hard work. And homework. The type of thing that gives you the confidence to get behind the market's most-hated stock at its lows. Now that P is one of Wall Street's most beloved tickers, Seeking Alpha continues to allow these flimsy and borderline unethical bear cases to be made.
What makes this even worse is that you could, quite credibly, float more-than-reasonable Pandora short theses. Given my knowledge of the company I could present a more sane, logical and well-informed one than "Quoth the Raven," even though I would have to discipline myself to play devil's advocate in the process.
The moderation in growth is a non-factor at Pandora because, it has been long accounted for. It's the Internet radio actors who have not built up the necessary scale to sell meaningful amounts of advertising or survive under the subscription model that we should be worrying about.
And, as much as people want to make it so, Apple's (AAPL - Get Report) iTunes Radio, isn't out to kill, crush or even slightly harm Pandora by default or by design.
I have held back writing this article for months. My inclination is to not give free publicity to those who do not deserve it. But, in complete and total seriousness, Seeking Alpha, by virtue of being associated with this material, does itself, its readers, wider audiences and both the financial and broad media a grave disservice.
I know Pandora quite well. That doesn't mean I always have been or always will be right on the trajectory of the company or stock. It does, however, give me license to let you know something -- most of what you read about Pandora -- even on the bull side -- does not come as the result of rigor.
That's sad because you can get there by sending a few emails, making a couple phone calls and setting an appointment or two with Pandora executives who are more than willing to engage in the most straightforward manner, openly discussing successes as well as areas of concern.
--Written by Rocco Pendola in Santa Monica, Calif.