WOW! Pandora IPO Rips Much Higher than Investors Expected

Pandora Radio (P), the internet radio service, debuted on public markets today and is already trading around ~$22 a share. The company raised $234.9 million with underwriters yesterday. Is the Web 2.0 fire blazing stronger?

Don’t Miss: Pandora IPO Drawing a Mixed Set of Listeners.

Many investors will be watching the young, fast-growing media company closely to see if Pandora can extend a string of successful web IPOs in the last month, notably LinkedIn (NYSE:LNKD) and Yandex (NASDAQ:YNDX). According to one asset manager Pandora, which will trade under the ticker symbol (P), is hitting public markets at the perfect time, “There’s pent-up demand for high-growth, exciting business models. There’s demand and there just aren’t many ways to get access to it…After LinkedIn, there’s definitely some chasing going on.”

According to Bloomberg, Pandora will be looking to the “low float” approach to prop demand for its IPO, (from Bloomberg) “Pandora sold about 9.2 percent of its shares outstanding. For U.S. technology IPOs in the past year, the average float was 24 percent. Amid scarce supply, LinkedIn’s shares more than doubled in their first day of trading, giving the company a valuation of $8.91 billion. Yandex jumped 55 percent in Nasdaq Stock Market trading after raising $1.3 billion in an initial public offering that sold above the proposed price range.”

Higher initial pricing may indicate larger than previously thought demand for the young radio company, though discouraging financials still may force caution from investors. Pandora has lost roughly $20 million over the last two years despite recently topping a mark of 90 million registered users. Increasing royalty costs have weighed hard on the company, having multiplied substantially since Pandora began offering its personalized online radio services several years ago.

Morgan Stanley (NYSE:MS), JP Morgan Chase (NYSE:JPM), and Citigroup (NYSE:C), led yesterday’s offering.