Yesterday Pandora's stock [P] hit new highs, and today is more of the same. On Monday Pandora announced both strong annual user growth and the rollout of in-car advertising with a roster of major brands on board. The growth is a good sign that they're maintaining strength in the face of competitors while further establishing themselves in the auto with ad-supported music. In this case the market clearly agrees with strong volume supporting the rise in price.
Pandora's stock rose rapidly yesterday hitting a new high of 32.45 and closing at 31.49, a 14% rise. Today Pandora reached a new high of 33.70 and is still well above 33.00 at a few minutes before noon.
Why the excitement?
Pandora Shows Strong Annual User Growth
The biggest cause is likely to be Pandora's unexpected user growth:
- Listener hours for Pandora during the month of December 2013 were 1.58 billion, an increase of 13% from 1.39 billion during the same period last year.
- Share of total U.S. radio listening for Pandora in December 2013 was 8.60%, an increase from 7.58% at the same time last year.
- Active listeners were 76.2 million at the end of December 2013, an increase of 13% from 67.1 million during the same time period last year.
Pandora Launches In-Car Advertising Platform
News from the Consumer Electronics Show currently taking place in Las Vegas regarding in-car advertising also provided news indicating strongly positive future potential:
"Pandora...announced it will begin rolling out in-car advertising solutions this month. Major national brands including BP, Ford Motor Company, State Farm and Taco Bell are on board to take advantage of the first-to-market opportunity."
"Pandora...is currently available on nine out of the 10 best-selling passenger vehicles. More than 4 million unique users have activated Pandora through a native integration across the 23 major auto brands and 8 aftermarket manufacturers on the company’s partner roster, representing an increase of 244 percent from the same time last year."
Given the growing themes of both music streaming and Internet services in the car, this combination of news items must have been particularly intoxicating to investors.
- First Wave Of iTunes Radio Advertisers Weigh In
- Pandora Steps Up Attack On $14B Radio Ad Market
- From CES 2012: Justin Timberlake, MySpace On Your TV, Pandora In Your Car
Hypebot Senior Contributor Clyde Smith (Twitter/Facebook) is building a writing hub at Flux Research. To suggest topics about music tech, DIY music biz or music marketing for Hypebot, contact: clyde(at)fluxresearch(dot)com.