Pandora Sale Deadline Is Today And It’s Stock Is Falling [UPDATED]


Pandora-new-logo-image-001[UPDATED] Investors pushed Pandora’s stock (NYSE: P) price down 4% Wednesday to a yearly low of $8.48.  The decline came as Pandora reached today’s June 8th self imposed deadline to sell or accept onerous terms on $150 million loan.

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UPDATE: Pandora stock fell another 1% in the first minutes of trading on Thursday to $8.40 per share, then rebounded 1.1% to $8.59 by 10 AM ET. 

Last month Pandora announced it had entered into an agreement for a $150 million strategic investment from KKR. But the music streamer also reported a big quarterly loss and the new investment came at a price. 

That drove Pandora’s stock price down 4% Wednesday to a yearly low of $8.48.

Under the terms of the investment, which is scheduled to close this week, KKR would purchase $150 million in a new designated Series A convertible preferred Pandora stock. Pandora will pay dividends to the holders quarterly at an annualized rate of 7.5% if paid in cash or 8% if paid in kind. Even worse, the Series A stock is convertible into common stock, cash or a combination thereof at a conversion price of $13.50 per share – well above the stock’s most recent closing price of $8.48.

In an attempt to find a more desirable option, Pandora also announced that it would aggressively seek a buyer, setting a one month deadline of today June 8th.

Since then rumors have swirled that Liberty Media’s SiriusXM remains a suitor, with price the sticking point. And earlier this week, the NY Post reported that Verizon could offer $100 million to join KKR as an investor.

But with today’s deadline looming, investors are nervous. 

Offering some hope that Pandora’s stock price may have bottomed out, before market trading had pushed the price back up 2.3% to $8.68 early Thursday morning.