Pandora Media is on the launching pad for its $100 million IPO. The company has updated its prospectus with an expected pricing range of $7-9 per share and more details.
Pandora itself is selling only five million shares. At the mid-point of $8, that would raise $40 million in new cash. If the IPO is oversubscribed, the company will make up to a little over two million additional shares available to the underwriters. 8.7 million shares are being sold by early investors, who would pocket over $69 million at the $8 price.
By the way, the IPO has grown to be more than the original $100 million. Depending on the pricing it could go as high as $141.6 million, which is what is covered by the SEC registration fee paid by Pandora. Of course, the company could pay the SEC more if the pricing goes above $9 per share.
Pandora won’t really put much cash in its coffers from the IPO. $29.7 million of the proceeds will go to pay accrued dividends on the company’s convertible preferred stock.
As reported by RBR-TVBR just a few days ago, Pandora Media moved further away from cash flow break even in Q1 of its fiscal year. It posted an operating loss of $5.2 million, a loss that was 82% bigger than a year earlier.
The IPO date is not yet set, but Pandora Media could be public before this month is out. The stock will trade on the NYSE with the symbol “P.”
At the minimum, public shareholders will own a little under 9% of Pandora after the IPO. If the full greenshoe is picked up by the underwriters that will grow to a bit shy of 10%.
RBR-TVBR observation: We have no doubts that the stock price will quickly jump into double digits. But how long will it say there if Pandora can’t get its business to positive cash flow?