Peter Kafka

Recent Posts by Peter Kafka

Pandora Investors Listen to iTunes Radio, Buy More Pandora Shares, Set Record High

Pandora investors used to be skittish types. They sold their stock whenever anyone murmured about the prospects of a rival Web radio service from Apple. And that happened a lot last year.

But things are different in 2013. Pandora stock has been on a tear, even when it became clear that iTunes Radio was a go, for real.

And now that iTunes Radio really is real, with yesterday’s debut of iOS 7, Pandora investors are even more confident.

Today the stock hit a record high of $27.50, before closing at $27.35. Perspective: As recently as last fall, the stock was barely hovering around $7.

I know better than to try to guess why shares move up or down. But I can point out things Pandora investors seem to have responded to in the recent past: They were probably very happy to see a strong earnings report in August, and they were probably happy that a few days ago the company hired Brian McAndrews, an exec with a strong ad background, to run the company.

And in a bit of self-perpetuating cheerfulness, they are ecstatic that a secondary offering is selling like Miley Cyrus tickets used to sell in her pre-twerking days.

I also know it is way, way, way too early to make any conclusions about iTunes Radio as a competitive product.

If Apple’s service does start taking listener and/or advertising share from Pandora, it’s not going to show up for a long time. Pandora has more than 70 million users, and a lot of them are going to need to learn about what Apple has to offer, and then start using it, in order to move the dial.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work