Pandora Media Inc. (P) has signaled to investors that it's serious about remaking the internet radio company. And the market has applauded.
Shares of the Oakland, Calif., company were rising 4.7% in after-hours trading on Monday, Aug. 14, after announcing that Roger Lynch, CEO of Sling TV, the online pay-TV service owned by Dish Network Corp. (DISH) , will succeed Tim Westergren as CEO. (Naveen Chopra has been interim chief executive since June.) Lynch's first day is scheduled for Sept. 18, the company said in a statement.
Pandora closed on Monday at $8.07, its shares having fallen 39% over the past 12 months.
Lynch's hiring comes several weeks after Westergren was pushed out of the company that he co-founded and satellite radio operator Sirius XM Holdings Inc. (SIRI) invested $480 million in Pandora. Westergren's tenure had been criticized by Greg Maffei, CEO of Liberty Media Corp. (FWONA) , which controls Sirius XM, for spending millions of dollars building an on-demand music service to rival Spotify Ltd., Apple (AAPL) Music, Alphabet Inc.'s (GOOGL) YouTube and Amazon (AMZN) Prime Music, among others.
Maffei and other Liberty executives made clear that Pandora should have focused on its ad-supported free music service rather than attempting to do battle with a market leader, Spotify, along with the world's largest technology companies.
Lynch certainly has a lot of work to do. Pandora has posted losses in each of the past nine quarters despite building an internet radio service with some 80 million monthly users. But Pandora has often been a company forever reaching for the next star. Rather than focusing on its free ad-supported radio service, Pandora executives sought to build a concert ticket business as well as a music on-demand subscription service.
On agreeing to the Sirius XM investment, Pandora sold the concert ticket business, Ticketfly, to Eventbrite Inc. for $200 million, less than two years after acquiring it in a cash-and-stock transaction valued at $450 million.
Lynch, who has been credited with building Sling TV into a popular "skinny bundle" pay-TV service, also will take the title of president and join Pandora's board of directors. Also added to the company's board was Michael Lynton, former CEO of Sony (SNE) Entertainment and currently chairman of the board at Snap Inc. (SNAP) .