And by the end of Thursday, following a 24 percent stock drop, Pandora was worth $2.1 billion.

What happened?

Anyone who can tell you, with a straight face, why Pandora investors bid the stock up one day and crushed it the next is full of it.

But just to be clear: Other than showing up at the New York Stock Exchange to ring the bell and give some interviews, Pandora executives didn’t do a thing to make the company more or less valuable in the last two days. And nothing outside the company affected its intrinsic value, either.

So unless you’re day-trading, Pandora’s temporary gyrations shouldn’t be that interesting. More interesting: What do the company’s next couple years look like? And crucially, what happens in 2015, when the company’s music licenses get reset?

Here’s Pandora CEO Joe Kennedy’s take, via an edited Q&A I conducted with him in the IPO aftermath:

Peter Kafka: Pandora only offers Web radio, which has been great for you because it means you haven’t had to strike individual licensing deals with music labels. But it also limits the service you can offer. Do you think you’ll end up working with the music industry to expand your offerings?

Joe Kennedy: Our focus is on radio. The research indicates that 80 percent of the average American’s music consumption is in radio form. Only 20 percent is CDs, or iTunes, iPod or whatever. We’ve dedicated ourselves to that 80 percent of the market, radio-like listening, serendipitous listening. It leverages 11-plus years of intellectual property, and that really is our focus as a company.

We’re more than happy to leave the 20 percent to Sony Walkmen, iPods, iTunes, iCloud, Rhapsody, MOG, Spotify, you name it.

But a lot of people seem to think of you in the same category as all of those other services, anyway. Is that a good thing?

Consumers do this 80 percent/20 percent thing without thinking about it. I don’t think they’ve ever thought about it consciously.

As far as general commentary about digital music, I think there is a lack of discrimination: “Oh, it’s digital music. Oh, it’s streaming.” By implication, it all meets the same consumer need. I think that will go through increased refinement and precision over time.

But some services are going to end up mashing up different kinds of features, anyway. Google was reportedly trying to offer a cloud locker, and a store, and a Web radio service like yours. You sure you want to stay streaming radio only?

Yes. We’d rather be best in the world at one thing that’s a great big piece of the market than be less-than-best in the world at several things.

The licensing deal you have goes away in 2015, and lots of people think that when that happens, the music industry will insist on extracting every bit of revenue they can from you. You’ll be worth $3 billion and they’ll want to grab $2.9 billion of it for themselves. How do you plan for that?

We operate under Federal statutory licenses. The license mandates arbitration proceedings every five years, and it’s Federally administered. It’s not a negotiated process. We believe that that process will yield an economically reasonable outcome.

So let me translate: What you’re staying is that this isn’t like iTunes, or Spotify, where a label could say, “I don’t want to participate.”

It’s fundamentally different.

And you’re saying that at some point, you’ll have a deal, brokered by a neutral party, and that if it’s at least not fair, it will be equally disappointing for both sides. And that you guys can live with that.

The law proscribes that judges determine the rates at which a willing buyer and a willing seller would meet in a marketplace transaction. No party has the ability to say, “I’m not in.” It is an economic analysis.

You usage is up dramatically, driven in large part by mobile use via Android and the iPhone. But mobile revenue isn’t that big for you. How do you change that?

We generate considerable revenue from mobile. I believe we’re one of the biggest mobile advertising sites in the country. Today, mobile advertising is more nascent than desktop advertising, which took 10 to 15 years to develop, but mobile is growing far faster. Key pieces of the puzzle, like third-party measurement, are just coming in. We’ll benefit tremendously from that.

Radio advertising is local, and you guys are predominantly selling national spots. Are you going to have to ramp up to sell locally?

That’s part of the advertising opportunity. But the vast majority of the biggest national online brands spending money on the interactive market — the vast majority of them already spend money on Pandora. We have the opportunity to take that spending and expand it to mobile. So we don’t see our opportunity limited to one bucket or another. We’re fully legitimately an online player, fully legitimately a mobile player, and fully legitimately a radio player.

Cars are a big part of the bull story for you guys — that at some point you’re going to be competing directly with radio on most people’s dashboards. When does that become a big deal for you?

We’ve had announcements from six of the world’s major automakers — Ford, Toyota, GM, Mercedes, BMW and Hyundai — and they’ve all said “we’re going to integrate Pandora into our vehicles going forward.” Now, the nature of automotive is, it isn’t a flip-the-switch phenomena. It rolls out over several models, over time. And then you have a replacement cycle that’s about 7 years per car. So I think of automotive as a snowball, that starts out relatively small, but builds and builds and builds and builds. You get out to years five to ten, and it’s tremendously big.

So five to 10 years?

The way I’d phrase it is that it starts out relatively small, and snowballs.

And over the next five years, we have the explosion of smartphones. They’re selling at a 15 million per quarter pace in the U.S. alone, 15 million android and iPhones. A good year in the car business in 15 million.

The business networking company had a stunning debut on the NYSE today, with early trading so far maintaining a doubling of its initial pricing.

Current and former LinkedIn employees and investors are jubilant, and seem to be bursting to talk about the IPO after a four-month quiet period. They’re sharing their IPO celebration with images and words posted mostly on Twitter.

LinkedIn has put up a blog post celebrating the four users it invited to the New York Stock Exchange this morning, and it’s retweeting other celebratory tweets from its official account.

Reid Hoffman, who owns 21 percent of LinkedIn, giving him about $1.7 billion of the company at today’s valuation, hasn’t updated his Twitter yet.

LinkedIn raised $352.8 million in the offering. It had revenue of $243 million in 2010 and $94 million in the first quarter of 2011, mostly from subscriptions. If early trading holds, LinkedIn would have a valuation of nearly $9 billion.

Update: The pop did hold through first-day trading, eliciting much bubble talk.

Image via LinkedIn CEO Jeff Weiner on Twitter.

The successful IPO comes despite the fact that 1) Renren is not profitable, 2) it has only 31 million active users and declining growth numbers in light of increased competition, and 3) the company lowered its growth numbers since first filing to go public and the head of its audit committee resigned from the company’s board earlier this week after allegations of fraud at one of his other companies.

But did we mention? China! Social network! SocialnetworkChina!

Shares of Renren opened at $14 and were trading above $18 the rest of the day.

Investors in Renren, which also offers group buying deals and games, include Softbank, DCM and General Atlantic, and the company is also allowing Alibaba Group, China Media Capital and CITIC Securities to buy $110 million worth of shares today through a private placement. The company had revenues of $76.5 million in 2010 with a net loss of $61.2 million.

Image credits: Stock chart via Marketwatch; Renren growth chart via RedTech Advisors, which has a PDF report on the company here.

Sprint shares tumbled 13 percent to $4.39 in Monday morning trading on the New York Stock Exchange, even as shares of rivals were trading higher. The stock had gained 19 percent this year through Friday’s close.

“This will certainly make Sprint’s life more difficult,” said Roger Entner, a consultant with Recon Analytics.

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And lots of investors don’t care. I’d heard Demand’s public offering, led by Goldman Sachs and Morgan Stanley, was oversubscribed, and yesterday the company confirmed it: Demand said it had increased the size and price of the deal, selling 8.9 million shares at $17, instead of its initial plan to sell 7.5 million at $14 to $16.

That gives Richard Rosenblatt’s company a value, for the moment, of just under $1.5 billion–about the same as the New York Times.

Now everyone else gets to vote, when the shares list today, trading on the New York Stock Exchange under the DMD ticker.

It will be tempting to overestimate the meaning of the stock’s first-day movement (or in subsequent days, for that matter), so I’ll try hard not to. But we can at least agree that this the first big-name Web company to go public in a very, very long time.

So even if Demand’s business didn’t have anything to do with the media business, it would get plenty of scrutiny.

And, of course, Demand is in the media business, using a model that terrifies lots of people in the media business. It produces lots and lots of Google-ready content at very low prices, with the help of computer taskmasters and an army of freelancers.

Lucky for me! None of them write news stories about media companies going public. So I’ll make the most of the opportunity and check back in later today.

The results were led by strong growth in sales of IBM’s System Z mainframe servers, which were up 69 percent. That contributed to a 21 percent boost in sales in the Systems and Technology segment, which totaled $6.3 billion. Software sales were $7 billion, up 7 percent. Services revenue was $10.2 billion, up 2 percent.

It finished the year with earnings of $11.52, up 15 percent, on sales of $99.9 billion, which were up 4 percent form 2009. It was the eighth year in a row of double-digit per-share profit growth.

Looking ahead to the new fiscal year, IBM said it expects per-share earnings of at least $12.56 on a GAAP basis and at least $13 on a non-GAAP basis. This would put it on track to meet its road map that calls for earning of at least $20 a share in operating profit by 2015.

IBM shares rose 65 cents to close at $150.65 on the New York Stock Exchange, which amounts to a record, and climbed as high as $155 in after-hours trading.

The split has been a long time in the making. Owners of the old Motorola got one share of Motorola Mobility for each eight shares they owned and the remaining company then underwent a one-for-seven reverse stock split. The two halves had been trading separately on a “when issued” basis for a while now.

Both of the company’s leaders praised the move and promised that only good things will come of it.

“After more than two years of planning, today we begin operating as a financially strong, independent company trading on the New York Stock Exchange,” Motorola Mobility CEO Sanjay Jha said in a statement, touting the company’s smartphone and video business.

Motorola Solutions’ CEO Greg Brown sounded an equally optimistic note.

“With a purpose-driven brand and a strong balance sheet, we are very well positioned for the future,” Brown said.

For now, the two companies have joint custody of the name and logo. Motorola has also split its Web site in two (see below) with options pointing to each of the now separate Motorolas. Or would that be Motorolae, or perhaps Motoroli?

Interest from the two software giants would seem a plausible explanation for the peculiar circumstances around Autonomy’s on-again, off-again talks about making an acquisition.

In April it said it would sell convertible bonds to raise money–nearly $800 million–to fund an acquisition, though it never named a target.

Then suddenly last month the company said the deal it had been working on was being put off because of another unspecified opportunity, which promptly sent its stock reeling. Autonomy shares, which trade on London’s FTSE, are down 27 percent from their 52-week high. It could be that whatever deal the company was working on was put on the back burner following unexpected overtures from Larry Ellison and Steve Ballmer.

Autonomy specializes in what it calls Meaning Based Computing. Its software is designed to recognize the relationships between structured data–what you find in an organized database–and unstructured data–which can be anything from words in a written document, a speech or conversation, or anything else that has information that isn’t organized into rows and columns. Its customers run the gamut from businesses such as FedEx, the NYSE, Louis Vuitton and Goodyear to tech firms like Adobe and Cisco Systems.

On its face this rumor is interesting because now that the battle to roll up the data storage firms is largely resolved following Dell’s acquisition of Compellent, one of the next dealmaking battle fronts for the large IT vendors is going to be software that makes managing data in all its various forms easier, more powerful and less costly.

Autonomy certainly fits that bill, and at market valuation in the $7 billion neighborhood, both Oracle and Microsoft could get it done.

However, the cynic in me wonders if this is just a deliberate rumor intended to goose Autonomy’s flagging stock price. If that’s the case, it appears to have worked.

FriendFinder, which operates more than a dozen Web sites aimed primarily at people looking for relationships or flings, changed its name 18 months ago from Penthouse Media Group. It isn’t profitable, and until recently was in default on its debt covenants.

It struck a deal in October with its creditors to waive its defaults in exchange for all the money it raises in its initial public offering.

It is hoping for $200 million in net proceeds from the sale of 20 million shares through RenCap Securities and Ledgemont Capital Markets LLC, according to its prospectus, with an estimated price range of $10 to $12, and a listing on the New York Stock Exchange with symbol FFN.

The company is portraying itself as a potential catch in the social-networking industry, a sector that has few stand-alone stocks and a lot of buzz. It describes itself as a leading “social networking and multimedia entertainment company,” and in prerecorded roadshows compares itself with privately held Facebook Inc. and MySpace, owned by News Corp. (NWS), publisher of The Wall Street Journal.

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This morning, after AOL execs ring the opening bell at the New York Stock Exchange, the latest chapter for the long-troubled Internet icon begins as it tries to convince Wall Street that this time will be the charm.

AOL officially spins off from Time Warner when the markets open for trading on the NYSE, and here is what the company is whispering to investors:

Really. We promise this time will be different. Really. Not like the last time we promised and it was not different at all and, to be honest, was worse! Or the 17 times before that. Cross our hearts. We’ve changed. Really.

Still, despite AOL’s various missteps over the years–including being part of one of the more disastrous mergers in history–several big investors BoomTown asked this week said they were willing to give the company a break.

Shareholders of record at 5 pm ET on Nov. 27 got one share of AOL for every 11 shares of Time Warner (TWX) on the day of the long-expected spinoff of the Internet service.

A typical response was Henry Ellenbogen’s of T. Rowe Price. While noting he does not comment on the firm’s trades, he added: “[AOL CEO] Tim Armstrong has laid out a thoughtful plan focusing on rebuilding the fundamentals of the business.”

As a big holder of Time Warner shares, T. Rowe Price now has a clutch of AOL stock–which will trade under the “AOL” ticker–from its 3.64 percent stake in the media giant.

Another big stockholder of AOL, who wanted to remain unnamed, said much the same: “They still have tons of problems and issues. But, I really like Tim. If it can be turned around, he’s the best guy to do it.”

Added the investor: “It’s very cheap, so I think it’s like owning an out-of-the-money options. You can make a lot of money if it works
when you start with a $2.4 billion market cap.”

That’s what AOL is valued at today, although it was worth a lot more only a month ago, a valuation based on Time Warner’s share price, which made AOL worth just over $3 billion when the spinoff plan was announced. (The stock has actually been trading on a “when issued” basis.)

But let’s have a moment of solemn reflection: AOL was valued at about $163 billion at the turn of the century.

In any case, the real game begins this morning, when AOL flies free from Time Warner for good (riddance?).

The new company’s execs and clients were certainly flying high last night on the floor of the NYSE, where AOL held a big, honking party.

Here’s a video I did of the event, which includes a parade of AOL execs posing with guest celeb, Diddy.

As in the hipster rap mogul, who has also been known as Puff Daddy, P. Diddy and, of course, Sean Combs, whom Armstrong should put on the AOL board pronto.

Maybe then we can say AOL has definitely changed!

Judge for yourselves from this video (I will also have another video up later of my interviews with various AOL execs at the party, and you can see the video tour of AOL HQ and an Armstrong interview I did yesterday here):

]]> http://allthingsd.com/20091210/will-wall-street-heart-aol-today-even-if-it-partied-hearty-at-the-nyse-last-night/feed/ 3 http://allthingsd.com/20091116/aol-to-spin-off-december-9-begin-trading-december-10/ http://allthingsd.com/20091116/aol-to-spin-off-december-9-begin-trading-december-10/#comments Tue, 17 Nov 2009 00:01:57 +0000 Kara Swisher http://kara.allthingsd.com/?p=20661

AOL will officially be spun off from Time Warner on Dec. 9, with trading to begin the next day.

Shareholders of record at 5 pm ET on Nov. 27 will get one share of AOL for every 11 shares of Time Warner (TWX) on the day of the long-expected spinoff of the Internet service.

At Time Warner’s current market cap of $38 billion, that gives AOL an implied value of $3.2 billion–a fraction of Google’s (GOOG) $20 billion valuation of the portal in 2005, when it invested $1 billion in the property. And it’s even lower than the $5.5 billion valuation Google gave the company last January, when it wrote down its investment.

AOL will trade on the New York Stock Exchange as “AOL.”

Ironically, before it merged with Time Warner at the dawn of the new century, AOL previously traded on the NYSE.

AOL went public on Nasdaq on March 19, 1992, under the ticker “AMER,” and moved to the NYSE on Sept. 16, 1996 trading as “AOL.”

(Fun fact: BoomTown actually attended both the fancy dinner the night before AOL moved to the NYSE from Nasdaq and the AOL party on Wall Street the next day.)

If you want to get really technical, AOL common stock will begin trading on a “when-issued” basis–you really don’t want to know the confusing regulatory details of why–on the NYSE under the symbol “AOL WI” beginning on Nov. 24, 2009.

On Dec. 10, when-issued trading of AOL common stock will end and “regular-way” trading under the symbol “AOL” will begin.

After that, it will be up to CEO Tim Armstrong to make the long-suffering AOL into the little Internet company that could.

The separation of AOL and Time Warner is also symbolic, dismantling the most potent symbol of Web 1.0, when AOL essentially got control of the media giant, only to see the merger crash in disaster.

If at first you don’t succeed…

Here’s the full Time Warner press release on the transaction:

Time Warner Declares Spin-off Dividend of AOL Shares

Record and Distribution Dates and Final Distribution Ratio Announced

NEW YORK–(BUSINESS WIRE)–Nov. 16, 2009–Time Warner Inc. (NYSE:TWX) and AOL Inc. today announced the timing and details regarding the spin-off of AOL from Time Warner.

The Time Warner board of directors has approved the final distribution ratio and declared a pro rata dividend of the shares of AOL common stock owned by Time Warner that will result in the complete legal and structural separation of the two companies.

On the distribution date of December 9, 2009, Time Warner stockholders of record as of 5 p.m. on November 27, 2009, the record date for the distribution, will receive one share of AOL common stock for every eleven shares of Time Warner common stock they hold.

Fractional shares of AOL common stock will not be distributed to Time Warner stockholders. Instead, the fractional shares of AOL common stock will be aggregated and sold in the open market, with the net proceeds distributed pro rata in the form of cash payments to Time Warner stockholders who would otherwise be entitled to receive a fractional share of AOL common stock.

No action or payment is required by Time Warner stockholders to receive the shares of AOL common stock. Stockholders who hold Time Warner common stock on the record date will receive a book-entry account statement reflecting their ownership of AOL common stock or their brokerage account will be credited with the AOL shares. An Information Statement containing details regarding the distribution of the AOL common stock and AOL’s business and management following the AOL spin-off will be mailed to Time Warner stockholders prior to the distribution date.

The AOL spin-off has been structured to qualify as a tax-free dividend to Time Warner stockholders for U.S. federal income tax purposes. Cash received in lieu of fractional shares, however, will be taxable. Time Warner stockholders are urged to consult with their tax advisors with respect to the U.S. federal, state, local and foreign tax consequences of the AOL spin-off.

Shares of Time Warner common stock will continue to trade “regular way” on the New York Stock Exchange (“NYSE”) under the symbol “TWX” through the distribution date of December 9, 2009, and thereafter. Any holders of shares of Time Warner common stock who sell Time Warner shares regular way on or before December 9, 2009, will also be selling their right to receive shares of AOL common stock. Investors are encouraged to consult with their financial advisers regarding the specific implications of buying or selling Time Warner common stock on or before the distribution date.

AOL common stock will begin trading on a “when-issued” basis on the NYSE under the symbol “AOL WI” beginning on November 24, 2009. On December 10, 2009, when-issued trading of AOL common stock will end and “regular-way” trading under the symbol “AOL” will begin. The CUSIP number for the AOL common stock will be 00184X 105 when regular-way trading begins.

Time Warner and AOL have entered into a Separation and Distribution Agreement and several other agreements related to the AOL spin-off. The completion of the AOL spin-off is subject to the satisfaction or waiver of a number of conditions, including the Registration Statement on Form 10 for the AOL common stock being declared effective by the Securities and Exchange Commission (“SEC”), the AOL common stock being authorized for listing on the NYSE and certain other conditions described in the Information Statement included in the Form 10 and in the agreements filed as exhibits to the Form 10. The condition relating to the authorization of the AOL common stock for listing on the NYSE has been satisfied, and today AOL sent a letter to the SEC requesting that the Form 10 be declared effective. Time Warner and AOL expect all other conditions to the AOL spin-off to be satisfied on or before the distribution date.

]]> http://allthingsd.com/20091116/aol-to-spin-off-december-9-begin-trading-december-10/feed/ 1 http://allthingsd.com/20091028/ibm-sells-unit-expands-buyback/ http://allthingsd.com/20091028/ibm-sells-unit-expands-buyback/#comments Wed, 28 Oct 2009 18:01:24 +0000 William M. Bulkeley http://voices.allthingsd.com/?p=17152 Dassault Systèmes SA agreed to pay $600 million to buy an International Business Machines Corp. (IBM) unit that sells Dassault’s design software.

The sale to Dassault, which makes software for computer-aided design and product management, removes one of the last vestiges of IBM’s once vast applications-software business. The two companies will retain a formal alliance in which the French company will recommend IBM services and infrastructure software.

Separately, IBM’s board expanded its stock buyback program, authorizing the spending of another $5 billion. It currently has $4.2 billion remaining from previous repurchase programs. The buyback announcement sparked a rally in IBM stock, which rose $1.06 to $121.17 in midday New York Stock Exchange trading.

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]]> http://allthingsd.com/20091028/ibm-sells-unit-expands-buyback/feed/ 0 http://allthingsd.com/20081212/nortel-agonistes/ http://allthingsd.com/20081212/nortel-agonistes/#comments Fri, 12 Dec 2008 22:53:07 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=9584 Nortel Networks is slipping closer to the abyss each day. Earlier this week it was reported that the long-suffering telecommunications equipment maker is seeking advice from Lazard Ltd. and law firm Cleary Gottlieb Steen & Hamilton about bankruptcy proceedings. Now comes news that it has received a delisting notice from the New York Stock Exchange. If Nortel (NT) can’t get its stock price above the required $1-a-share minimum the NYSE requires, its shares, which have lost a stupefying 97 percent of their value this year, will be delisted.

Grim news for the once-darling tech company, which was worth about $250 billion.

Its market value today: about $275 million.

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