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Updated to include Pandora's IPO pricing information.



) -- If Wall Street were to draft an ad looking for new companies to take public it would likely include the line -- No profits necessary.

Pandora Media


is a great example as the company is losing money even as its revenues increase. The leading name in Internet radio is seeing heavy demand for its IPO, which priced at $16 -- higher than both of the previously expected price ranges of $10-$12 and $7-$9.

On a positive note, in its

latest amended S-1 filing with the Securities and Exchange Commission

, Pandora said revenue more than doubled in the quarter ended on April 30 to $51 million from $21.6 million in the same period a year earlier. Unfortunately, that hasn't translated to earnings as losses swelled to $6.8 million in the April-ended quarter from $3 million last year. Including stock and dividend awards, the latest loss equaled $9.1 million.

Pandora claims to own 50% of the Internet radio market, reporting that it had more than 90 million registered users as of April, and its basic service is free to use, unlike

Sirius XM Radio

(SIRI) - Get Sirius XM Holdings, Inc. Report

, which promised big subscriber growth back in the day but has been drowning in the cost to get those subscribers.

Increased music acquisition costs are a bugaboo for Pandora, and this is in some ways an uncontrollable expense. Another big drain may be improving its bookkeeping as Pandora has been told by its accountants that there are weaknesses in its internal controls.

Pandora's response was: "We are just beginning the costly and challenging process of compiling the system and processing documentation needed to comply with such requirements," which is surprising given the original S-1 was filed back in February. It's fair to ask why Pandora is even going public if the potential for accounting issues is serious enough to merit mention by its auditors. What happens if this problem isn't resolved properly? The shareholders will turn off the noise and sell the stock, so be warned.

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Another point to bear in mind is that Pandora's growth is mostly coming from demand for its mobile application. Unfortunately, the ad revenue is lowest in that arena as only 1% of all advertising spending goes to mobile real estate. To date, the company has made no money on mobile advertising, even though 60% of its listeners are on mobile.

Granted, losing money doesn't seem to be a problem for some IPO investors.



was up front about its money-making prospects in its filing, but that didn't scare away the traders that pushed the stock to nearly $123 in its debut. Of course, reality has sunk in and the stock has dropped back to the low $70s. Other examples include


(RENN) - Get Renren Inc. Report

, the so-called Facebook of China, which closed Monday down more than 14% at $8, well below its $18 pricing in early May.


has also had an uneven road to profits. The company lost $43 million in 2009 and crawled back to a profit in 2010 with net income of $5 million. Plus, this isn't Bankrate's first trip to the IPO market. It was a public company for 10 years before Ben Holdings, which is advised by Apax Holdings, took the company private in a $571 million deal in 2009. In 2010, the company loaded up on debt and now is raising money to pay that down that same debt.

The company's path to growth features initiatives like increasing traffic through SEO optimization, PR efforts and acquisitions, and while it claims to have a unique product, there are many similar offerings of content and calculators online, including





Another concern is that the bulk of Bankrate's product offerings are mortgage related, an area that continues to suffer. Mortgage applications are at all-time lows, along with refinancings. New home buying is nearly non-existent. That leaves credit card rate comparisons, but it seems the rates are all pretty similar. There seems to be demand for this mature internet company, but there really isn't anything new or different from the company that left the markets two years ago. Bankrate is looking to sell 20 million shares later this week with a projected pricing range of $14-$16.

And finally,

Compressco Partners

is a small deal at $50 million.The company is a limited partnership formed by the parent company

TETRA Technologies

(TTI) - Get TETRA Technologies, Inc. Report

, and it's seeking to sell 2.5 million shares with a pricing range of $19-$21.

The company provides natural gas wellhead compression-based production services, and the parent company's stock has trended downward lately, usually not a good sign ahead of an IPO. Compressco also states in its filing that it has to pay out so much cash each quarter, that it might not be able to cover those obligations from its operations. If the company can't meet those obligations, how can it compete?


Written by Debra Borchardt in New York


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