Media

Why Sirius XM Is Investing Half a Billion in Pandora

Thinkstock

Pandora Media Inc. (NYSE: P) shares saw a handy gain on Friday after the company announced that Sirius XM Holdings Inc. (NASDAQ: SIRI) would be making a $480 million strategic cash investment in it. The capital provided through this investment will allow Pandora to make targeted investments and capitalize on opportunities to build on its position in the streaming radio business.

Under the terms of the agreement, a subsidiary of Sirius will purchase an aggregate of $480 million in newly issued Series A convertible preferred stock of Pandora. Sirius purchased $172.5 million of Series A preferred stock upon execution of the agreement and has agreed to purchase the balance of the Series A preferred stock at a second closing.

The Series A preferred stock will represent a stake of 19% of Pandora’s currently outstanding common stock and a 16% stake on an as-converted basis.

At the same time, three individuals designated by Sirius will be named to the Pandora board of directors. One of those individuals will serve as chairman, and Sirius-designated directors will serve as select board committee representatives.

Jim Meyer, CEO of Sirius, commented:

This strategic investment in Pandora represents a unique opportunity for SiriusXM to create value for its stockholders by investing in the leader in the ad-supported digital radio business, a space where SiriusXM does not play today. Pandora’s large user base and its ability to provide listeners with a personalized music experience are tremendous assets. With its strong technology and new product offerings, we believe there are exciting opportunities for Pandora to accelerate its growth and increase value for Pandora and SiriusXM stockholders.

Shares of Pandora were last seen up about 4% at $8.75 on Friday, with a consensus analyst price target of $13.02 and a 52-week trading range of $8.14 to $14.98.

Sirius shares were trading down 1% at $5.35. The 52-week range is $3.74 to $5.53, and the consensus price target is $5.21.

Are You Still Paying With a Debit Card?

The average American spends $17,274 on debit cards a year, and it’s a HUGE mistake. First, debit cards don’t have the same fraud protections as credit cards. Once your money is gone, it’s gone. But more importantly you can actually get something back from this spending every time you swipe.

Issuers are handing out wild bonuses right now. With some you can earn up to 5% back on every purchase. That’s like getting a 5% discount on everything you buy!

Our top pick is kind of hard to imagine. Not only does it pay up to 5% back, it also includes a $200 cash back reward in the first six months, a 0% intro APR, and…. $0 annual fee. It’s quite literally free money for any one that uses a card regularly. Click here to learn more!

 

Flywheel Publishing has partnered with CardRatings to provide coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.

AI Portfolio

Discover Our Top AI Stocks

Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.

You can follow him investing $500,000 of his own money on our top AI stocks for free.