Pandora Media Inc (NYSE:P) stock was down on Friday and there could be a couple of reasons for the drop.
There has been talk recently of a merger between Pandora Media Inc and Sirius XM Holdings Inc. (NASDAQ:SIRI). However, SIRI CFO David Frear said that it is “not very likely” that the company will acquire the music streaming service.
The statement from Frear comes as a blow to Pandora Media Inc stock, which was gaining in December following speculation that Sirius XM Holdings Inc. would acquire the company for $15 per share. This would have valued the company at roughly $3.4 billion.
Frear was also critical of Pandora Media Inc’s plans to launch an on-demand service. He doesn’t believe that it will succeed when it launches early in 2017. Instead, he said that Sirius XM Holdings Inc. will just sit back and watch how that effort goes for P, reports Business Insider.
Pandora Media Inc’s on-demand service will be called “Pandora Premium.” It will cost users $9.99 per month and will offer several new features. However, the company will have to pull the 58 million of its users that already have premium music streaming accounts with other providers back to its service for this to be a success.
Analysts at Barrington Research have also downgraded Pandora Media Inc. stock. The company has been downgraded from a rating of “Outperform” to a new rating of “Market Perform.” The current consensus for P stock is “Hold” with an average target price of $14.51.
P stock was down 3% and SIRI stock was down slightly as of Friday afternoon.
