

Pandora plans $231M share offering - antr
http://www.sec.gov/Archives/edgar/data/1230276/000104746913009097/a2216690zs-3asr.htm

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buckbova
This is a risky investment as it was.

Poor stock holders are getting screwed by this. If you are holding, sell as
soon as you are able.

I'm always amazed when a company can have such a high share price when it
hasn't proven it has a profitable business model.

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lutusp
> I'm always amazed when a company can have such a high share price when it
> hasn't proven it has a profitable business model.

It's simple probability. You assemble a database of tech companies and their
histories -- what happened to them over time, how they were funded, how their
stock fared. Then, when you want to evaluate a new company, you compare it to
your database, see how other similar companies evolved. You get a statistical
sense of the possible outcomes.

Using that data, you invest in companies based on the probability that they
will be successful, and the share price is part of the gamble (and it is
certainly a gamble). In fact, if you think about it, the fact that the share
price is high means other people are doing the same probabilistic calculation
and bidding up the price as well.

It's not an accident -- it't a lot of people betting the company will succeed.
Obviously by buying the shares, they're also providing the capital that
company needs to grow, so it's more than a blind gamble. It's also to some
extent a self-fulfilling prophecy.

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buckbova
> It's simple probability.

No it's not.

It's hype, buyout rumors, etc. The stock price will fall hard.

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deelowe
If you're so confident, why not short it?

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lutusp
> If you're so confident, why not short it?

What? He should tell you his investment strategy? These things are secret for
a reason. As William Goldman famously said, no one knows anything.

[http://en.wikipedia.org/wiki/Adventures_in_the_Screen_Trade](http://en.wikipedia.org/wiki/Adventures_in_the_Screen_Trade)

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deelowe
My point isn't that he should share anything. It's that the market has options
for both sides. If one thinks he is a savant and that everyone else is idiots,
he should do the opposite strategy. As soon as he started doing that, he'd
learn a little about how this sort of thing works.

See, the rub is that Pandora shouldn't be evaluated as a single stock, but as
part of a broader portfolio. Only amateurs scrutinize individual stocks in
this way. As an example, one strategy might be that the investor has
determined that internet radio will eventually take off and kill traditional
radio. So, as part of a broader investment strategy, you move your money out
of traditional radio and into a diversified pool of internet radio
business(pandora is just one). If everyone else starts doing this, the stock
goes up. It doesn't matter what pandora is doing individually.

~~~
lutusp
> If one thinks he is a savant and that everyone else is idiots, he should do
> the opposite strategy.

Yes, fair enough. You've suggested what's called the contrarian strategy --
find out what people are doing and do the opposite. Sometimes effective,
sometimes not.

But the real players (and the people I can't stand) are those who take some
kind of position in a stock, then either tout or disparage a company or stock
without revealing that only they stand to benefit from the advice they're
giving out, and the audience only stands to lose by following it. That's what
makes me crazy about most people who offer stock or investment advice --
they're not usually obliged to reveal any conflict of interest that may exist.

> Only amateurs scrutinize individual stocks in this way.

Very true. My only advice is meta-advice -- invest in an index fund, not
individual stocks, then sit on your investment. In other words, don't play the
market at all, just ride the long-term pattern of equities growth. Avoid
thinking you can outsmart all the day traders and insiders. More here:
[http://arachnoid.com/equities_myths](http://arachnoid.com/equities_myths)

------
YOSPOS
They're going to need every last dollar they can get once people start using
iTunes Radio.

~~~
baddox
What do you see them being able to do, even with a bunch more capital?

