Pandora Media Inc. (NYSE:P) stock hit a record high on Thursday after the company announced an expanded stock offering with the intention of competing with terrestrial radio stations for advertisers as the online music streaming service continues to do everything it can to better monetize its free radio.
Pandora plans to sell 13 million shares at $25 a pop, up from previous plans to sell just 10 million shares. At the close of trading on Thursday, the stock had risen 6.7 percent to $27.35, the highest price seen since the company first went public. Shares were slightly down from that figure during trading on Friday to $26.46 at the time of writing.
According to a regulatory filing seen by Bloomberg, Pandora is raising $312.9 million to open more offices and get a hold of a bigger slice of the $15 billion market in local U.S. advertising from terrestrial radio stations. Some of the proceeds could be used for possible acquisitions and new technology, although Pandora said to the publication that it wasn’t currently in talks to make any acquisitions.
Another part of Pandora’s efforts to become more profitable has been its fierce fighting to cut the royalties it pays to record companies, musicians, and songwriters in exchange for the ability to stream their music. On Wednesday the company notched a win in court against the American Society of Composers, Authors and Publishers — an organization representing musicians and songwriters that Pandora has long been battling with over royalty fees. A court granted Pandora an order prohibiting ASCAP from limiting the songs in its repertoire it allows Pandora to use.
The litigation between the two parties is far from over, though. “The court’s decision to grant summary judgment on this matter has no impact on our fundamental position in this case that songwriters deserve fair pay for their hard work, an issue that the court has not yet decided,” John Lofrumento, ASCAP’s chief executive officer, said in a statement.
Last week, Pandora appointed a new CEO, announcing that Brian McAndrews would replace Joe Kennedy in the position, effective immediately. Analysts believe that McAndrews will keep Pandora focused on growing its revenue and has the advertising experience to help Pandora find new and better ways to monetize its free service.
Pandora said the offering will close by September 24.
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