NEW YORK (TheStreet) -- Pandora Media (P)  stock is falling 4.91% to $13.57 in mid-morning trading on Thursday after the company announced a $300 million convertible notes offering.

The Oakland-based Internet radio service company said on Wednesday that it was offering $300 million in convertible senior notes due in 2020.

Pandora said it will use proceeds from the offering for general corporate purposes.

Additionally, competitor Spotify has replaced Pandora as the most popular music streaming smartphone application in the last year, according to a report on Tuesday by the firm App Annie.

TheStreet Recommends

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 a number of negative factors, 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 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 4143.4% when compared to the same quarter one year ago, falling from -$2.03 million to -$85.93 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.44%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 3900.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • PANDORA MEDIA INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This year, the market expects an improvement in earnings ($0.10 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.
  • The gross profit margin for PANDORA MEDIA INC is rather high; currently it is at 53.47%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -27.58% is in-line with the industry average.
  • You can view the full analysis from the report here: P

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.