Pandora, a company incinerating cash at seemingly-impossible levels, is now stretching its finances even further. According to details first emerging on Wednesday, the billion-burning Pandora is now attempting to secure an additional $300 million in debt while its stock valuation remains guttered.
The convertible debt offering, opened to creditors this week, would allow Pandora to further bankroll a grandiose roadmap that includes an on-demand subscription play and a broad, international expansion. Already, Pandora has spent more than half-a-billion acquiring companies in the past few months, part of a cash-burning inferno that makes the movie Backdraft look like a soggy cigarette butt. The searing heat includes a curious $450 million purchase of Ticketfly and a near-$80 million acquisition of bankrupted Rdio, not to mention a $50 million purchase of analytics firm Next Big Sound.
All of that is on top of quarterly losses tipping $90 million, enough to make Wall Street a nervous bear on the stock. Shares of Pandora (P) remain 22 percent below June levels, a reality that makes the stock exchange a difficult piggybank to smash. Back in 2011, Pandora rustled $235 million from its IPO, with a secondary offering in 2013 that rallied another $250 million. But Pandora has remained profitless throughout, with top executives like co-founder Tim Westergren minting tens of million in personal gains and while pursuing lavish ‘investments’.
Meanwhile, the situation around on-demand streaming music remains a soggy and speculative mess. The freshly-bankrupted Rdio is now on life-support, with Pandora tossing an emergency $2.5 million to keep the patient from flatlining. Looking ahead, the major labels are undoubtedly preparing for a huge windfall, with Pandora a perfectly-plump target for massively-overpriced recording licenses.
More as the wildfire ensues!