Is Pandora going to be able to survive without being acquired? This has become a common question for investors after rumors surfaced about Apple launching a platform that will compete against Pandora. Investors of Sirius XM have been jumping for joy at this news.
Why? Because if Apple takes out the main rival to Sirius, it seems obvious that the satellite radio giant is going to benefit. But is Apple going to launch this platform? Apple will not confirm it to be true, but many tech experts think it’s a done deal.
As of right now, Pandora is riding high. It had a great third quarter, and its revenues shot up 60%. However, it looks to be a long shot for Pandora to stay on its own if Apple enters this market. Apple never plays to lose, after all.
This could mean that the 4th quarter results for Pandora could be ugly. If Pandora drops to $5 or worse, Facebook or Google, who has been in talks with Dish Network, could step in. It is hard to imagine either company not buying Pandora. Google has a strong cash position and it likes to annoy Apple. And, Facebook will have reason to want to limit Pandora’s improvements in revenue for its mobile users.
Facebook, who has made other recent acquisitions, might be able to beat Google to the punch on Pandora. Facebook is sitting on $10 billion in cash, and it can buy Pandora tomorrow. But, Facebook just might wait to see how committed Apple is to building a streaming platform, then step in when Pandora’s stock drops.
It’s possible that Sirius XM could acquire Pandora, too. Regardless of who the buyer is, it seems likely that Pandora’s days as an independent company are numbered.