The initial enthusiasm for Pandora Media Inc. on its first day of trading appears to be fizzling. The shares of the Internet radio company popped as high as $26 (U.S.) soon after trading began, but were recently spotted at $18.30. In other words, anyone who bought this stock on the open market is likely nursing a loss right now.
Pandora's initial public offering drew comparisons to other highly successful Internet-related IPOs this year, which have tapped into a strong desire among investors to gain exposure to this latest wave of technology know-how. Networking site LinkedIn Corp. and Russian search engine Yandex NV also surged on their first day of trading - and both serve as warm-up acts to rumours that Facebook Inc. will do an IPO later this year.
Despite the afternoon setback for Pandora, there is still a lot to celebrate here - at least for insiders who were able to get their hands on shares before they hit the market. The company's offering price was boosted from a range between $10 and $12 a share to a final price of $16 a share on Tuesday evening, valuing the company at about $2.6-billion.
As for latecomers, there's always the hope that Wednesday's fizzle will prove to be a temporary setback amid a disastrous day for the broader stock market.