When Pandora first came out, it was amazing. We all loved how it could intuitively understand our tastes in music. Pandora understood, somehow, the subtle differences within a genre simply by analyzing an artist you might pick. And it's free.
You can filter out all the music within a genre you don't care for, and focus on music you like. At the gym, sitting on your riding lawnmower, even riding in the car (if your reception is strong enough), you can rock your own personal station.
But in investing, a person needs to take out all emotion. We've heard that said a million times, but people continue to make the same mistake.
I like Pandora. But I no longer use it. Between Spotify, music I've purchased on Apple's (AAPL) iTunes and terrestrial radio, there's no need.
Competition and tastes would never allow Pandora to thrive financially. While Pandora traded down to the $8 range, it has traded all the way up to $37. The stock closed Thursday at $28.72.
Those stock fluctuations didn't change its business model. It's still outdated!
Pandora has never been and will never be a profitable business if it doesn't radically change its business model.
Spotify is currently its biggest competition. The huge attraction for Spotify is that one can actually chose a particular song. As with Pandora's pay service, there are no commercials. It is just as intuitive about selections and recommending songs. The difference is that Spotify doesn't offer a free service.