Pandora sees stock surge on its debut
PANDORA yesterday became the latest technology IPO to set the markets on fire, climbing over 60 per cent during the day after pricing well above the top of its range.
The music streaming service floated at $16 (£9.86) a share after naming a range of between $10-12, a price that had already been increased from $7-9.
Its market cap after the float, which raised $235m, was around $2.6bn. Yesterday its stock reached as high as $23.75, following the blistering lead set by LinkedIn last month, though it closed at a more sedate $17.42.
Loss-making Pandora’s float has once again stoked discussions of a second dot.com bubble, with its valuation an eye watering 19 times its sales. This pales in comparison to LinkedIn, which floated at 30 times its sales.
Unlike an otherwise tepid IPO market, technology floats have met with roaring success this year. RenRen, the “Chinese Facebook” kicked things off in May with a listing that valued it at $5.1bn. It surged as high as $8bn before later falling back to below its float price. Russian search engine Yandex raised $1.3bn in a float that gave it a market cap in excess of $11bn before climbing 55 per cent on its debut.
The stage is now set for even bigger players to try their luck at market, with Facebook eyeing a $100bn float in the first quarter of 2012 and Groupon hoping to achieve a valuation of around $30bn.