Pandora stock takes a beating on Apple music service rumor
updated 04:31 pm EDT, Fri September 7, 2012
Three months of Pandora stock price gains lost in one day
Following a report that Apple was planning its own streaming music service, shares of Pandora Music have plummeted more than 16 percent, with most of the losses happening overnight following the wide distribution of the rumor. According to The Wall Street Journal, Apple has been in negotiations with record labels to license music for a service that would play songs based on listener's genre or artist selection.
In one day of trading, all of Pandora's gains over the last three months were wiped out. Just last week, Pandora reported quarterly results that beat projections from advertising revenue gains as more people listened to music on mobile than expected.
Apple's service is said to be initially aimed at iOS devices, with OS X and Windows versions following after initial release. Apple's streaming service is expected to be free, and bring in revenue through through Apple's iAd program and steer users towards purchases through the iTunes store. Apple is attempting to negotiate licenses to offer users better control over content that what Pandora is able to provide. Pandora currently sees about 45 percent of its use from iOS devices.
Wedbush analyst Michael Pachter said in regards to the Apple rumor that "reports are likely to negatively impact Pandora shares for the foreseeable future." Representatives from Apple and Pandora have not commented on the stock value loss.
