The accelerated dump-off schedule closely coincides with the launch of Apple iRadio, with cashouts now exceeding $2 million a month. And all of this is coming from Tim Westergren: the guy who started it all, and believed in Pandora the most.
Not only that, Tim Westegren — the guy who supposedly believed in Pandora the most — has nearly exhausted his available holdings.
Any questions?
(Data compiled from documents filed with the SEC, and ample help from SEC Form 4. Written while listening to Rodriguez).
Now just what might Tim Westergren know about Pandora’s future that we don’t…
I don’t see what it says about Pandora’s future,
More likely, it tells a little bit about the founder’s financial present and short term future.
Well I guess you aren’t using your brain to think about it then, because when the guy with the “vision” who is steering the ship cashes out, it says a lot about the future. In fact it usually means very specific things. Tim selling his stock means that he doesn’t think the company is going to grow and become profitable, or maybe worse, that he no longer cares. It probably means he thinks the value of that stock, and therefore the company itself, is going to go down, not up. It also means that he is feeling the pressure from the competition. It also may represent just why he was so adamant about lowering royalty rates for musicians – because even though his company makes about a 35GP, he is greedier than that and wants more profit to flow his way. Anyone who has worked hard to build a company wants to make money. And if you can’t flip your company for an immense profit, and you can’t make it profitable, then your only option is a stock sell off. Lame, and very transparent.
you assume straight away that the future of the pandora is linked to his CEO ?
I could reciprocate the insulting terms about one’s not using his own brain , lol 🙂
there can be many, many reasons why a founder sells his stocks, most of them do not jeopardize the company’s future.
Oh please. Westergren worked his ass off for a decade & more than deserves to cash out. He was living hand to mouth to build the company – prior to the IPO I doubt he was rich. The threat apple poses is real so if u were in his situation u would do the same. Doesn’t mean P is in trouble it just means Westergren isn’t going to risk it all.
Wonder what Steve Jobs’ charts would have looked like a year before his death.
It is actually somewhat positive to see the lack of response to this telling information. Who knows what transpires behind board room doors.
I believe Internet radio, in general, has and continues to contribute to the perception that music is value-less and treated as the prize in the Cracker Jack box as opposed to being the key driver of business.
I was heartened to read that Beats Music has plans to make their service pay only. It tells me their owners have respect for their product and understand as music people the value of supporting a healthy eco-system for the future creation of music as opposed to simply putting numbers up on the board for investors and stock holders.
What does an on demand streaming service (Beats) have to do with Pandora, a streaming radio service? I don’t understand how you’re making that direct comparison.
Pandora isn’t contributing to “the perception that music is value-less” any more than terrestrial radio is or has.
These types of comments suggest that you have a fundamental misunderstanding of how consumers interact with these different services, & what their perceptions actually are.
JW. I don’t think your point is valid. The customers don’t make that distinction. Pandora has a pay-to-play model .
If you don’t think my point is valid, that just proves the point.
If terrestrial radio offered premium, ad-free access to their stations & the ability to skip songs, that could potentially add perceived value to the product. That’s what premium means. But the existance of that option wouldn’t mean that the standard terrestrial offering is, by comparison, devaluing music in the perception of the consumer because free radio is & has for quite some time been the baseline.
Free, on demand, user directed streaming is something that’s very different than radio. And yes, the customers do totally make that distinction. What on earth leads you to believe that they don’t?
I don’t begrudge Westergren, or anyone in his position, the right to cash out and enjoy his winnings. He has plugged away for years to make Pandora a success, and he deserves what he gets.
Whether or not the timing and amount of his sales are good for his company’s valuation is between him and his exec team, but I know what I would do: grab the cash while it’s hanging there in front of me. I just don’t think it’s a rational position to let that much money ride on a single bet.
Paul, are you sure he has nearly exhausted his holdings? There were reports when Pandora went public two years ago that his net worth around was $75M -100M. And that was when the stock price was in the mid-teens.
If he’s only cashed out $23M, wouldn’t he still have around 3/4 left?
thx
If the first graph is correct, the second chart appears grossly out-of-whack unless they are related to options restrictions.
The threat isn’t from Apple or Spotify. It’s from the inevitable bust due to cannibalization and exponential devaluation of music. This fire sale of music only ends one of a few ways – artists stop signing with record companies en masse over $0.00005 per stream and starts selling direct to customer via their sites or proprietary apps OR someone steps in to regulate and standardize streaming services to make it more lucrative for artists directly. Either way, I think the honchos at these places know their model isn’t sustainable.