NEW YORK (TheStreet) -- Shares of Pandora (P) are down by 2.41% to $21.45 in pre-market trading on Wednesday morning, after the music streaming service announced it will acquire Ticketfly for $450 million in cash and stock.
Ticketfly is a live event promoter offering tickets and a competitor to the popular event sales site Ticketmaster.
"This is a game changer for Pandora, and much more importantly, a game changer for music," Pandora CEO Brain McAndrews said in a statement announcing the deal.
"Over the past 10 years, we have amassed the largest, most engaged audience in streaming music history. With Ticketfly, we will thrill music lovers and lift ticket sales for artists as the most effective market place for connecting music makers to fans," the CEO continued.
With Pandora in control of Ticketfly it could spell trouble for Ticketmaster, as Pandora has a history of using its users' data for marketing purposes, the New York Times reports.
Separately, TheStreet Ratings team rates PANDORA MEDIA INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
We rate PANDORA MEDIA INC (P) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 37.0% when compared to the same quarter one year ago, falling from -$11.73 million to -$16.07 million.
- Net operating cash flow has decreased to -$9.92 million or 39.17% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of PANDORA MEDIA INC has not done very well: it is down 10.81% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- PANDORA MEDIA INC's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($0.19 versus -$0.15).
- Compared to other companies in the Internet Software & Services industry and the overall market, PANDORA MEDIA INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: P