When this thing was in the teens and single digits, everybody hated it. But that was because nobody understood the story. Now, everybody understands the story, but the story's old and on the brink of being useless.
To be clear -- Pandora's core business is, all else equal, a good business. But all else is not equal, therefore the answer to the question Is Pandora's core business a good business must be yes and no.
... in that Pandora can continue to make headway going after the $14-16 billion (whatever it is) traditional radio advertising market. Slowly but surely, Pandora will do a billion in annual revenue by itself on the back of this long-standing ambition. It really was a stroke of genius when former Pandora CEO Joe Kennedy decided Pandora would be radio (redefined), going after vulnerable broadcast radio companies.
... in that Pandora's growth, relative to what we have seen these last few years, will be modest. You can't float a modest growth story -- without a compelling narrative for massive potential elsewhere -- and expect to command the type of multiple Pandora stock commands forever. Amazon.com (AMZN) can do this because that company reinvests aggressively in a wide-ranging and obviously lucrative multi-pronged model confidently navigated by a CEO people have faith in. Meantime, Pandora's basically telling investors We're going to essentially do what traditional radio does only we'll do it better ... and slightly different.
But traditional radio is no longer shellshocked by Pandora. Yes, some broadcast radio executives still try to disprove Pandora's impressive numbers and act as if it's not really "radio" or a player at all, but, by and large, the radio guys have regrouped and can sell advertising clients pretty much the same package Pandora can. In fact, in some cases (like if you're Clear Channel selling your stations and iHeart Radio or if you're Cumulus Media (CMLS) presumably selling stations alongside Rdio at some point), the package broadcast radio sells can come off as more intriguing than Pandora's.
That's where the CEO comes in. That's where we hit a crossroads -- Pandora either needs to issue a mea culpa admitting Brian McAndrews was a terrible choice for CEO and blow the guy out or bring somebody in to directly assist him and/or help him change his ways.
Because ... now more than ever --