PANDORA A PYRAMID SCHEME!

[joshzz]

Unfortunately, I can't reach millions with my statement but at least I can touch a few lives thru this forum.

Please do not invest in Pandora. It is a pyramid "ponzi" scheme in which the investment bankers make a fortune hyping up the company, buying before the IPO is released and then selling within days to a bedazzled slew of rosey eyed investors.

This is what is wrong with America. The investment bankers are corrupt; Goldman Sachs, Morgan Stanley, JP Chase, CItibank etc.

Pandora is just another company they manipulate to get the public excited about make billions off it and then the general public is left invested in a company that's worthless. These bankers are putting the money into the company to make it appear viable .. Once the IPO is released they'll be selling as they are doing with Linkedin, an absolutely bland website that has as much creativity as the typical 8 year old's website. Crispy Creme is another one of those companies the bankers made a fortune with and then dumped in a hurry. CHeck out it's current share price.

 

[davideduardo]

Pandora is just another company they manipulate to get the public excited about make billions off it and then the general public is left invested in a company that's worthless. These bankers are putting the money into the company to make it appear viable .. Once the IPO is released they'll be selling as they are doing with Linkedin, an absolutely bland website that has as much creativity as the typical 8 year old's website. Crispy Creme is another one of those companies the bankers made a fortune with and then dumped in a hurry. CHeck out it's current share price.

Unfortunately, you haven't seen how the SEC controls IPO's and how, in general, they work.

In really simple form, the underwriter(s) of the IPO are given a position in the stock for the services they render. If the stock goes up when it pops, then they make more. If it tanks, then they make less. But what they are getting is a fee or commission for doing the work.

You expected them to do it for free?

There would be no IPOs unless someone were there to do the necessary work. Entrepreneurial companies would not have funding and would not go public and grow or reward the founders. Larger family businesses could not preserve capital and insure the business' future for the sake of the employees in the case where no heir wishes to run the business... or is unsuited to do so. Etc., etc.

Linkedin is the only social network I use; it's fabulous for the purposes it's intended for and I've made fabulous contacts and some considerable income through that. were investors a bit frenetic over one of the first big IPOs in the tech field in a long time? I guess that may be true, but Linkedin, like Pandora, is a new company in a new area, making the investment not suitable for Granny's retirement... but great for speculators.

Apple was a very risky stock when it first came out. And I could go on and on.

Krispy Kreme descended waaaaay after the IPO, mostly due to overambitious expansion. All stocks go up and down, generally based on things like P/E, dividends, growth, new products, etc. The donut company was founded in 1937, for gosh sakes. It was bought by conglomerate Beatrice Foods, and then taken private by a group of franchisees, going public in 2000. Nobody scammed the public there.

You might want to read about what a Ponzi scheme really is. Stock prices are not per se related to the "ponziness" of a company or its business.

 

[SirRoxalot]

Josh, you should also tell Grandma not to invest in the inevitable Clear Channel IPO that should come our way some time in early 2013 - right after profits have been padded by the next Presidential election. They need to generate some money before 2014.

 

[TheBigA]

I agree that buying stocks is not a ponzi scheme. Then again, I play the market. Buying stocks is more like gambling.

As for Pandora, I really believe the bloom is off the rose there. It's no longer the hot company it was just two years ago. They may have waited too long for the IPO. The best time was in 2008, but we all know what happened that year. So maybe it's good they waited. But that company has already peaked, and they haven't added any new products to freshen their brand. All they're focusing on now is sponsorships and revenues, and neither is likely to attract user passion. Pandora will be the Sirius of 2011. It will atract some excitement for a few months, and then level off. All of the majors are developing their own Pandora, and ultimately that competition will drive down revenues. Westergren will use the IPO to cash out, leaving the bean counters and MBAs to run the company, and it'll be like any other content company with no visionary at the helm.

 

[davideduardo]

I agree that buying stocks is not a ponzi scheme. Then again, I play the market. Buying stocks is more like gambling.

If you "play" the market, it is gambling. If you have a long term strategy with sound fundamentals at the base, you are investing.

As for Pandora, I really believe the bloom is off the rose there. It's no longer the hot company it was just two years ago. They may have waited too long for the IPO. The best time was in 2008, but we all know what happened that year. So maybe it's good they waited. But that company has already peaked, and they haven't added any new products to freshen their brand.

Every user "freshens the brand" by tailoring their "stations" to their own taste. Recently they have been working on a comedy option where the material you accept forms the base in style and content for other things you will get. That's a terrific innovation.

As their algorithms improve and they add variants, like mixes of spoken word and music, they will always be current and fresh. And the move is definitely to pure play, where they are the established brand.

All they're focusing on now is sponsorships and revenues, and neither is likely to attract user passion.

You speak like someone without a Pandora account. You can pay a little and get no commercials, and no time limits. Or free, with very few commercials. That's a terrific option, much better than satellte.

All of the majors are developing their own Pandora, and ultimately that competition will drive down revenues.

Samsung, Dell and all the majors are developing tablets. But the iPad has most of the market, and it's sales are growing.

Pure play can accomodate multiple players. But a great deal of the secret is in the software that determines what you get based on seed songs and approve / disapprove. Pandora is years ahead.

Westergren will use the IPO to cash out,...

He told you this when?

 

[TheBigA]

You can pay a little and get no commercials, and no time limits. Or free, with very few commercials. That's a terrific option, much better than satellte.

As I said, satellite is dead as a growth investment. Pandora is today's satellite. I'm not in favor of pay radio. They claim to be free internet radio, then ask for one's credit card number. There's nothing they provide for me that I can't do for myself.

However, I've attended Tim's seminars and I've had a chance to play with the program.

Samsung, Dell and all the majors are developing tablets. But the iPad has most of the market, and it's sales are growing.

Pandora has really tried to become like Apple. The web site has the simple Apple design. But I don't sense the kind of brand loyalty among consumers that Apple has. If someone else comes along that offers a similar system for less, Pandora will lose users.

As for Tim's future, I've heard him speak many times, and I sense he's grown weary from the fight. He told us once that he still doesn't own a car, and uses his wife's. He's been living this way for a long time, and it just sounds like he wants to cash out and get back to making music.

 

[TVradioguru]

Pandora reminds me of a more mature version of Broadcast.com. The only one who made any money off that venture was Mark Cuban.

Pandora isn't in for a long term strategy like Apple, but more waiting for a larger fish to bite.

 

[joshzz]

The hype for PANDORA will continue until everyone of the investment bankers such as Goldman Sachs etc.., cashes out.

It's all empty hype that they're paying the media to promote. Sad that the media doesn't disclose that every time they mention Pandora in a positive light that they're getting paid to say it. Whether you hear it on Leno, Letterman, etc., it's all been paid for.

I've always detested how Letterman would rave about Crispy Creme Donuts and then discovered his network was getting paid for the "pseudo impromtu mentions".

 

[SirRoxalot]

Yes, Pandora's being hyped. Even on this board, we read that "Pandora's Revenue Skyrockets 136%". Yeah? Try and find anything about Pandora's "profitability" on the web. I don't give a rats patootie about revenue if you're losing money producing it.

I don't disagree with Josh. The private equity guys are all about a quick or substantial return on their investments. They're not about operating, or buy & hold. It looks to me like they see other technologies on the horizon that may make Pandora less attractive, and are looking to bring people into the tent and turn them into Pandora believers. Once they collect the offerings, they'll be off to the next town -er company.

BTW, heard of the music service that let's you put in the name of a song, then switches you to whatever source is starting that song right now? You can even input a playlist. Sounds interesting, huh?

 

[davideduardo]

The hype for PANDORA will continue until everyone of the investment bankers such as Goldman Sachs etc.., cashes out.

First, learn who owns what. Goldman Sachs does not have equity in Pandora.

Fair Use from forbes.com at http://blogs.forbes.com/nicoleperlroth/2011/02/11/pandora-files-for-ipo/

"The biggest winners in a public offering would be Pandora’s investors: Crosslink Capital (owns 23%), Walden Venture Capital (19%), and Greylock Partners (14%). The offering would be the second big win for Greylock this year–the firm also owns 16% of LinkedIn, which filed two weeks ago. But according to the S-1, founder Tim Westergren owns less than 3% of the company."


Beneficial Ownership Prior to the Offering(
Greater than 5% Stockholders
Crosslink Capita 23%
Walden Venture Capital 19%
Greylock Partners(
14%
Labrador Ventures 8%
The Hearst Corporation 6%
GGV Capital
5%


Directors and officers with over 1%
Joseph Kennedy(8) 2.71

Thomas Conrad(9) 1.48


James M. P. Feuille 23.03
Peter Gotcher 1.05
Larry Marcus 18.59

David Sze 14.13
Tim Westergren( 2.39
Directors and Officers as a Group (13 persons) 66.60

[/quote]It's all empty hype that they're paying the media to promote.[/quote]

Have you looked at the "ratings" for web streaming? That's not hype, that's immense usage. When I have random people, like my dentist, who do not know I am associated with radio, spontaneously rave about Pandora, I can see something is happening.

Sad that the media doesn't disclose that every time they mention Pandora in a positive light that they're getting paid to say it. Whether you hear it on Leno, Letterman, etc., it's all been paid for.

Not necessarily. When something is used by about half of all adult Americans, it's going to be talked about just like Twitter and Facebook and iPods/iPhones/iPads. If half of Americans text, comedians make texting jokes. If nearly everyone at some point goes on a diet, they make dieting jokes.

I've always detested how Letterman would rave about Crispy Creme(sic) Donuts and then discovered his network was getting paid for the "pseudo impromtu mentions".

Yet there was a point at which Krispy Kreme was, in fact, on everything from Kramer to Oprah... sort of like edible hula hoops. It was a fair subject.

I think you should worry more about men in black, as this sounds like paranoia to me.

 

[SirRoxalot]

It ain't about the "who", it's about the process. People are finally catching on to the idea that an IPO is generally about private equity cashing out. You'd better look long and hard at the company's sustainability, or you're simply pushing up the IPO price for those guys so they can maximize their investment.

If you time the market correctly, you may make a profit. If you miss, you may take a beating. Just remember, you're playing with a market that can be manipulated by the big players to their advantage, not yours. They determine the timing in too many cases. Greed works for them, not you.

 

[davideduardo]

It ain't about the "who", it's about the process. People are finally catching on to the idea that an IPO is generally about private equity cashing out. You'd better look long and hard at the company's sustainability, or you're simply pushing up the IPO price for those guys so they can maximize their investment.

You are missing the main point: venture capitalists are often a necessity. They place risky bets based on the spreading of risk over many startups, knowing that a few will pay big.

Banks loan money against assets or projections, but startups seldom qualify. Entrepreneurs are generally not independently wealthy, so you can't count on personal funding. While previous eras permitted garage startups, try doing a new chipset in your bedroom today.

An IPO is the final stage of a venture capitalist's strategy... bet that your winners will outnumber loosers, and then take out the money when the business can be seen to have a good future prospect But without the venture capital, the company would not get to that point.

 

[SirRoxalot]

I haven't missed the point about venture capitalists at all. I understand their role. I also understand that they're very adept at manipulation of both companies and markets.

 

[TheBigA]

When it's your money, you get to play by your rules.

 

[SirRoxalot]

Well, they certainly don't play by anybody else's rules - God's, or the SEC's.

 

[davideduardo]

I haven't missed the point about venture capitalists at all. I understand their role. I also understand that they're very adept at manipulation of both companies and markets.

How much "manipulation" is needed when today it is reported that Pandora is approaching 100 million users, with a third considered active and average sessions (equivalent to AQH persons) that ranks Pandora in the top couple of "stations" 18-34 and 18-49 in major local markets? It's also reported that pure plays now represent 60% of streams, up from 50%, while radio station streams are down from 60% to 50% when compared to a year ago?

 

[joshzz]

David it's all hype.. smoke and mirrors. They can say anything they want as there is no watchdog monitoring them. It's all a fad thing and the truth is they are losing money. Broadcast.com dissolved into nothing and that's all this is.

 

[SirRoxalot]

How much "manipulation" is needed when today it is reported that Pandora is approaching 100 million users, with a third considered active and average sessions (equivalent to AQH persons) that ranks Pandora in the top couple of "stations" 18-34 and 18-49 in major local markets? It's also reported that pure plays now represent 60% of streams, up from 50%, while radio station streams are down from 60% to 50% when compared to a year ago?

Well, I guess this tells us that people who stream prefer the wider selection of pure-play purveyors like Pandora than the short playlist streams of the radio stations. Next, how does Pandora rank against radio, not just radio streaming. Most of all, is Pandora, or any other pure-play streamer, making money?

 

[KeithE4]

David it's all hype.. smoke and mirrors. They can say anything they want as there is no watchdog monitoring them. It's all a fad thing and the truth is they are losing money. Broadcast.com dissolved into nothing and that's all this is.

Broadcast.com was sold to Yahoo, who turned it into nothing, while Mark Cuban and his partners laughed all the way to the bank.

I can see Pandora eventually being bought by a huge company with cash to burn, and delusions of being a major content provider with the goal of controlling the market (Read: Micro$oft).

 

[TheBigA]

They like to throw around impressive numbers, but at the end of the day, their revenues are small potatoes. About the size of a single medium market broadcast station. And the catch 22 is that every time their audience grows, so does the rate of their music royalty. It's basically designed to restrict their growth.