As of now, the “great threat to Radio” is at the beginning of a very slow and painful decline to its ultimate place as another niche audio internet playlist, much like Sirius/XM has become. Of course we are talking about Pandora, whose stock just suffered another bone crushing loss of value (-10%) as investors now know its business model is genetically flawed. We are talking about Pandora, whose ominous audience erosion has been continuous for the past 5 months; both in time spent listening and log in occasions. “Active users” fell again from 76.2 million to 73.4 million as their “earnings guidance” to investors plunged for the second time in three months. Stock Scouter, a service of MSN, gives the stock a rating of only 3 out of 10.
A humbling 3 out of 10 rating for the “next great threat to Radio.” All that hype, all that attention, and all it comes down to is an embarrassing rating for its stock and its business model.
Pandora’s ultimate descent will not be pretty for investors or the “media experts,” but descending it surely is.
An inconvenient truth for yet another start-up trying to be Radio… Continue reading
You need not have an advanced degree in investing or have Wall Street insider information to see a trend that is so obvious, if we would only spend 10 minutes to really look at it.
2013 was a great year for Radio stocks with most publicly traded Radio companies doubling and/or tripling their 12 month performance. These stunning Radio stock increases can only be attributed to 3 key factors; a greatly improving ad revenue environment, a higher dividend to shareholders, and the realization from trading houses and investors that the ad supported, local Radio model works very well after all.
Why did it take these “experts” so many years to come to the same conclusion all of us in Radio knew all the time? Perhaps we need to understand that it takes most businesses a very long time to become established, profitable, and worthy of the public’s trust, like Radio has.
If the past is prologue, as suggested by William Shakespeare, then perhaps we need to be more cautious on what the financial/media experts are calling the “next big thing”. It is very difficult for any new medium to compete against Radio in the long term which makes investing in companies looking to compete with Radio a very risky proposition.
Here are just three glaring examples of why betting against Radio is a very bad investment decision. Continue reading
Pandora’s continued press barrage about growing revenue, ending caps on listening hours, and their “brilliant” idea of being more like Radio by adding commercial pods was supposed to impress investors and Wall Street. The effect was devastatingly the opposite.
Pandora’s stock plummeted 13% for the week ending August 24 on all this “good news” as investors’ fears about Pandora’s future continued to grow. And in its most deliberate statement about a stock in recent memory, The Motley Fool Investors Newsletter urged its readers to AVOID Pandora stock and sell its shares if owned…”NOW”! (Their word, not ours)
If Wall Street is not impressed with Pandora’s “growth” and so much of its future depends on investor money to survive, is the grim reaper of bankruptcy far behind? Continue reading