Pandora Shares Plunge On Fears Of Apple Service
Apple Inc’s potential launch of an online streaming music service ignited anew concerns about Pandora Media’s business prospects.
Shares of Pandora, which streams music online, tumbled 17 percent on Friday, closing at $10.47 after the Wall Street Journal reported that Apple is in talks with record labels to launch a similar service.
The news served as a fresh reminder for investors that Pandora faces fierce competition from the likes of Sirius XM Radio, Clear Channel and Spotify as they battle for listeners in the burgeoning online streaming radio market.
But some see Apple, with its enormous purse and ties to the music labels, as Pandora’s most serious challenger. “They are the biggest threat out there,” said Capstone Investments analyst Rory Maher. “They have quite a bit of leverage through iTunes.”
Representatives from Apple, whose talks about a streaming service are said to be in an the “early stages,” and Pandora declined to comment on the report.
Questions regarding Pandora’s long-term prospects have been dogging the company since it went public last year.