Oakland internet-radio pioneer Pandora reaches a deal to sell a 19 percent stake to Sirius XM. The deal keeps Pandora independent, but gives Sirius a big say in the company\u2019s future.<\/b>
\nOAKLAND \u2014 Pandora on Friday put an end to more than a year of speculation about whether the internet-radio company would sell itself or remain independent, by taking on a $480 million investment from satellite-radio pioneer Sirius XM.
But while Pandora will remain a standalone company, Sirius\u2019 investment ensures that it will have a big say in what Pandora\u2019s future looks like.
The Sirius investment amounts to that company acquiring 19 percent of Pandora and immediately becoming Pandora\u2019s largest shareholder. As part of the investment, Sirius will get three new seats on Pandora\u2019s board of directors, with one of those Sirius officials becoming chairman of Pandora\u2019s board. The Sirius appointments will expand Pandora\u2019s board to nine directors.
\u201cThis is a very significant juncture in Pandora\u2019s journey, \u201d said Pandora Chief Executive and co-founder Tim Westergren, in a statement announcing Sirius\u2019 investment. Westergren added that Sirius\u2019 involvement with Pandora \u201cgives us the flexibility we need to attack what is becoming a larger and larger opportunity as digital music enters a new golden age.\u201d
That opportunity lies largely in on-demand music streaming. In March, Pandora introduced Pandora Premium, its first fully on-demand subscription streaming option, which costs subscribers $9.99 a month. When Pandora reported its first-quarter results in May, the company said it had signed up 500,000 Premium subscribers on a trial basis.
Pandora also offers Pandora Plus, an ad-free music-streaming option for $4.99 a month that lets users skip an unlimited number of songs and replay songs, as well as its longtime ad-supported free music listening service.
But, Pandora has begun to feel the heat from rivals such as Spotify and Apple Music. During the first quarter of the year, Pandora reported 76.7 million active listeners and 5.21 billion listener hours, down from 79.4 million active listeners and 5.52 billion listener hours in the same period a year ago.
Stan Meyers, an analyst who covers Pandora for Piper Jaffray, said that while Sirius\u2019 investment in Pandora did not work out to the full acquisition that many had expected, it is significant enough that it should boost Pandora\u2019s position on Wall Street, and help it reach more potential listeners.
\u201cIt does meaningfully strengthen Pandora\u2019s balance sheet, which has been weighing in on the stock, and delivers a strategic partner that can help grow Pandora in the car, \u201d Meyers said.
Along with bringing Sirius on board, Pandora is also getting out of another business: Ticketfly.
Pandora said it had reached an agreement to sell its Ticketfly concert-ticketing business to Eventbrite in a deal valued at $200 million. Of that amount, Eventbrite will pay Pandora $150 million in cash and issue a $50 million note payable to Pandora. The size of the deal suggests Pandora may have had a hard time making a go of concert tickets, as Pandora paid $450 million for Ticketfly in October 2015.
Investor reaction to Sirius\u2019 investment in Pandora was mild, as Pandora\u2019s shares rose 1.2 percent to close at $8.52. For the year to date, Pandora\u2019s stock price has fallen nearly 35 percent.<\/p>\n

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