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Investors why did u buy Pandora when I told u it was a Pyramid Scheme?

J

joshzz

Why are people are foolish that they would invest in something that was obviously a pyramid scheme to make money?

Those connected to the stock have been selling off shares by the thousands.

You see this is how it works. A group of well to do people form a corporation and then connect with cronie corrupt investment bankers.

They form a plan which consists of buying toms of hype on radio/television/newspapers. I'm not talking about the normal 30 seconds ad that can be discerned by the viewers/listeners/readers as ads. Instead they pay off newspapers and radio mags to do their favorable press. They pay the companies that broadcast shows like Letterman to have Letterman say something positive about Pandora and they do the same with radio. All fraudalent hype and they're spending millions and millions of doing this while the average investor is thinking, "I've got to get some of this and get on the ground floor."

By the time the IPO is released, all the world wants to get in while the insiders are thinking all along, dumping time is here. When you see trhe name Goldman Sachs, JP Morgan Chase, etc., associated with a stock, you can be sure to stay away. They're all corrupt and will never change.
 
Disclaimer: I did not buy, nor have I ever owned, Pandora stock.

Josh, you do not understand the meaning of a pyramid scheme. This type of swindle, and it is a swindle, is a scheme whereby new money is attracted to pay old money. This is totally different than issuing an IPO.

IPO's are the initial stock offerings of previously private companies. There is usually a lot of hype proceeding an IPO as typically the first buyers (usually investment companies and their well-heeled major clients) scoop up the opening sales. The demand then pushes the stock price up so subsequent buyers pay more than the initial IPO. Eventually the 'panic' buying ceases, demand falls and the price drops. Simple economics of supply and demand.

The first purchasers typically make money if they sell their shares immediately. Later buyers take a larger risk because typically they pay more for their shares and demand has usually softened by that time.

In any case, IPO's are a regulated transaction by the SEC and are not, in any way, related to a pyramid scheme.
 
josh said:
By the time the IPO is released, all the world wants to get in while the insiders are thinking all along, dumping time is here. When you see trhe name Goldman Sachs, JP Morgan Chase, etc., associated with a stock, you can be sure to stay away. They're all corrupt and will never change.
Click to expand...

Pandora popped the same day that the market took its worst hit in nearly a year when the news of the strikes and violence in Greece cause a big sell off. If you look at the timing, you can see that the stock took off in initial trading, and the normal first day profit taking was heightened by the general bearish mood of the markets.

Investors should be aware that IPOs are generally very volatile in the first hours of trading, as a lot of subscribers go in immediately to sell, and there are many day traders buying and trading on the momentum indicators. Speculators and not investors abound during the first weeks if not months of an issue, too.

Venture capital firms and IPOs are just about the only source of financing for everything from biotech to consumer technology. Some do well, some don't. That's why the mutual funds that buy for dividends and sustained growth don't buy them, while the ones that buy small caps and technology do.

If you don't understand risk, you shouldn't be discussing the financial markets.
 
DavidEduardo said:
Pandora popped the same day that the market took its worst hit in nearly a year when the news of the strikes and violence in Greece cause a big sell off. If you look at the timing, you can see that the stock took off in initial trading, and the normal first day profit taking was heightened by the general bearish mood of the markets.
Click to expand...

But that doesn't explain why the stock dropped below the original IPO price on the second day. As others have noted, that was caused by an analyst who gave a recommendation to sell. I suggest many more people read that analyst's newsletter than read this board or a post by someone named "josh." The reason the analyst made the sell recommendation is because of Pandora's flawed business model.

Personally, I was bothered bothered by the comments of the Pandora President, who said he doesn't care about stock price. Of course he doesn't. He got his money. Any money he makes in the IPO is more than he had before. But anyone else doesn't get stock grants. They have to pay for it. He will learn that as a now-public company, it is his job to watch the stock price, and do everything in his power to make it increase. I expect they will be forced to make changes in the way the service works in order to increase profits, and that will anger and alienate many longtime users of Pandora.
 
TheBigA said:
But that doesn't explain why the stock dropped below the original IPO price on the second day.
Click to expand...

From "Fortune" comes this:

But reaching conclusions based on just three days of trading is sophomoric. Particularly in a week where the broader markets have see-sawed on domestic economic data and Greece's debt crisis.

http://finance.fortune.cnn.com/2011/06/17/cut-pandora-some-slack/?source=yahoo_quote

A lot of IPOs soar at the gate, then come down in the days after. In the case of Pandora, the somber economic news from the EU certainly put a cap on any IPO euphoria that might have sustained the issue.

The entire web entertainment sector is going to have to adjust to realities. Record companies have to create royalty models that allow sustainable businesses based on recorded music to thrive, oor they lose their principal method of exposure. Radio station streams with 15 minutes of commercials will not work, ever. Pureplays will have to offer even more eclectic ways to combine entertainment elements.

Each sector will find its proper balance with the others... and in the meantime, as consumers want more bandwidth, and cloud computing is widely promoted, better data plans from mobile providers will have to develop or entertainment and the carriers will similarly kill each other.
 
DavidEduardo said:
A lot of IPOs soar at the gate, then come down in the days after. In the case of Pandora, the somber economic news from the EU certainly put a cap on any IPO euphoria that might have sustained the issue.
Click to expand...

Sorry...I don't see it that way, and neither do a lot of other people familiar with the stock market. Like Reuters:

http://www.reuters.com/article/2011/06/17/markets-stocks-ipos-idUSN1728751420110617?feedType=RSS

Those who invest in companies with international interests, like GE or Panasonic, should be concerned. Pandora is primarily a domestic entertainment company. Today was an "up" day on Wall Street, and Pandora didn't recover. They didn't recover because the executives at the company don't seem to be "working the street," calming the fears, or addressing the primary issues.

It's pretty obvious that this IPO was going to follow this pattern regardless of what happened in Greece.
 
TheBigA said:
Today was an "up" day on Wall Street, and Pandora didn't recover. They didn't recover because the executives at the company don't seem to be "working the street," calming the fears, or addressing the primary issues.
Click to expand...

Yesteday, the NASDAQ and the small cap technology indices were both off. It was not an up day.
 
DavidEduardo said:
Yesteday, the NASDAQ and the small cap technology indices were both off. It was not an up day.
Click to expand...

Pandora is not on NASDAQ. I made money on my other technology stocks Friday.
 
Is anybody really surprised that the original investors snookered the suckers, pumped up interest in the Pandora IPO, and stuffed their pockets with cash? Let's see how much of that money gets poured back into the product.

Pandora's got a lot of people lining up to take on their methodology, including some of the big players in radio. Some pretty deep pockets there, with what looks to be a more sustainable business model.

Let's face it, stockholders - Pandora's peaked. The road from here is all downhill.
 
TheBigA said:
DavidEduardo said:
Yesteday, the NASDAQ and the small cap technology indices were both off. It was not an up day.
Click to expand...

Pandora is not on NASDAQ. I made money on my other technology stocks Friday.
Click to expand...

I was making the point that "the market" was not up on Friday. The small cap tech sector was down all over. Large cap techs were up or flat, depending on how you measure them.

My small caps were mostly off, and that was what dragged down any averages.
 
David, you point would be valid if Pandora was "just another stock". It's not. It's a featured player right now, establishing the value of a new technology. The trends for Pandora have very little to do with the rest of the sector.

There's plenty of talk about Pandora on the street. It's just that most of it isn't favorable in the long term.
 
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