This Day On The Street
Continue to site
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

Bearish Pandora For the Wrong Reasons

NEW YORK (TheStreet) -- Of all the companies I follow, there has never been one more misunderstood than Pandora (P - Get Report). When I was bullish Pandora, I had to distance my take from bullish, yet very different arguments. Now that I'm bearish, I often do the same.

You must ensure the reasons you're bullish or bearish make sense in support of whatever conclusions you come to. Check yourself. Because, if you don't and your reasons might not logically lead to your conclusion. Worse yet you could be merely co-opting consensus arguments to support your preconceived and desired outcome. This can make for particularly risky investing. Sometimes you'll be wrong and end up right anyway. But that's not a good habit to fall into.

Case in point -- an article published by TheStreet contributor David Meyers last Friday, Pandora's Got Static, Lost 53% in 6 Months.

In the article, Meyers (rightfully) gloats about being on the right side of Pandora stock. He laments moderating growth (which shouldn't come as a surprise; I've been telling you for years that growth would moderate at Pandora). Meyers goes on to make a statement that shows a misunderstanding of Pandora's core business model:

Ironically, Pandora boasted more listener hours this quarter. I fail to see the relevance in this. If the company doesn't have more listeners, it simply means old listeners are listening longer. I fail to see how that is at all beneficial in the long run. Maybe Pandora can squeeze in a few more commercials but that is not sustainable growth ( bold emphasis added).

That's like saying I can't get into Kate Upton because she's a redhead. There's just no legitimate nexus between the point Meyers made and his Pandora bearishness.

Investing and life lesson 101: If you "fail to see" something ask yourself why multiple times. Put yourself through the reflective and introspective ringer.

In this case, what Meyers fails to "see" are the basics of Pandora's primary business model.

  1 2

Rocco Pendola writes for TheStreet. He lives in Santa Monica. Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.


Chart of I:DJI
DOW 17,740.63 +79.92 0.45%
S&P 500 2,057.14 +6.51 0.32%
NASDAQ 4,736.1550 +19.0610 0.40%

Rocco's Tweets

Select the service that is right for you!

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr 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
  • Weekly roundups
Real Money Pro

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
Trifecta Stocks

Trifecta Stocks analyzes over 4,000 equities weekly to find the elite 1% of stocks that pass rigorous quantitative, fundamental and technical tests.

Product Features:
  • Model portfolio
  • Trade alerts
  • Recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
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
  • Upgrade/downgrade alerts
Dividend Stock Advisor

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
Growth Seeker

Chris Versace, using sophisticated stock screening and fundamental research, identifies potentially explosive small and mid-cap stocks.

Product Features:
  • Model portfolio
  • Small-cap and mid-cap focus
  • Intraday trade alerts
  • Weekly roundups
Daily Swing Trade

Master swing trader Alan Farley uses his sophisticated software screens to review thousands of stocks each day for you, to find just the handful that meet his demanding criteria.

Product Features:
  • Daily commentary and coaching on swing trading
  • Technical charts and analysis
Top Rated Stocks Top Rated Funds Top Rated ETFs