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As we witness what might ultimately become the second coming of the dot-com bubble, Pandora is serving as inspiration for other Internet-related companies aspiring to reap the rewards of an IPO. Pandora shares traded at $16 on Tuesday night, well above most expectations and enough to raise an additional $235 million, valuing the Internet radio company at $2.56 billion. Not bad for an unprofitable company that isn't expected to make a dime until January at the earliest.
According to several reports, the $16 share price is about double what was expected back in April when Pandora forecast a price range of $7 to $9. It's even higher than Pandora had predicted as recent as one week ago, when the firm increased the range to $10 to $12 a share, according to the Los Angeles Times.
Pandora isn't yet profitable on a net or operating basis, and has been unsuccessful in generating enough revenue from advertising and subscriptions to offset its royalty payments. That isn't expected to change until the beginning of next year. Nevertheless, the market for Internet related IPOs remains red hot.