The online music service priced its shares at $16 for an IPO, but the public was willing to pay more, valuing the company at nearly $3 billion

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The stock market faltered on Wednesday, but there was at least one bright spot: The debut of Pandora Media on the indexes with the symbol 'P'. With an initial public offering (IPO) price set at $16, Pandora's stock opened at $20 and spiked at $26 before settling down.

The online music service had initially targeted its IPO price at somewhere between $10 and $12. By bumping that number up before the debut, "its underwriters succeeded in pricing the issue closer to market, leaving less money on the table after the initial public offering," according to the the New York Times' Dealbook. And the number they picked seems to have been very close to what the public was willing to pay. The stock closed at $17.42, less than $1.50 more than the IPO set, and the company raised more than $230 million.

And there's more to be made. Pandora only made about one-tenth of its shares available to the public. "Such small floats tend to lead to big, first-day stock pops as investors clamor for a fixed supply of stock," according to the Wall Street Journal's Deal Journal. And clamor they did. At close, the company's market capitalization was close to $2.8 billion.

That's a whole lot of money, especially for a company that has yet to turn a profit. In the first three months of 2011, Pandora reported revenue in excess of $90 million -- but it still lost money, to the tune of about $300,000. Over the course of 2010, Pandora lost $1.8 million on revenue of $138 million. While Pandora does offer some premium service, the service is primarily a free one; it relies on Web advertising for most of its revenue.

A number of comparisons have been made to both LinkedIn, the social network for professionals, and Yandex, which has been called the Google of Russia. The two popular tech companies only recently debuted on the market and saw significant stock jumps on their first day. At their first close, LinkedIn and Yandex shares were priced at 84 percent and 55 percent, respectively, higher than their offering. On Wednesday, both stocks fell, but they're still above their IPO target price. We'll be watching Pandora over the upcoming weeks and months to see if it can maintain its place on the charts.

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Image: Pandora.

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