Pandora Media Inc (NYSE:P)
Today Pandora Media Inc (NYSE:P) hit a new 52-week low of $7.81 in inter-day trading. This new low is consistent with Pandora’s price action. Since the beginning of 2017, Pandora shares have closed each month at a lower price than it began the month with. What also serves as confirmation of lower lows are the volumes. Today’s volumes are over three times the 30-day, daily volume average of 10 million shares traded per day. Of note is the stock’s noticeable daily volume uptick after its price dropped below $10 in mid-May.
Cash for Convertible Preferred Shares
Interestingly, Pandora Media Inc (NYSE:P) last week announced last week an investment in the firm by SiriusXM (SIRI) radio in the form of convertible preferred stock. Terms of the agreement call for a total investment of $480 million in Pandora. Upon execution of the agreement, SiriusXM purchased $172.5 million of the convertible preferred shares with the balance to be invested in the future. The conversion price of the preferred stock is $10.50. That places the conversion price at a 14.2% premium to Pandora’s volume-weighted average price of the common shares for the 20 days preceding June 9, 2017.
Pandora is required to redeem the Series A preferred stock on the closing’s fifth anniversary for an amount equal to its liquidation preference plus all accrued and unpaid dividends. Pandora can also redeem the Series A preferred stock at any time after the third anniversary of the closing if the daily volume weighted average price of Pandora’s common stock is greater than, or equal to, 175% of the then-applicable conversion price for a period of at least 20 days during a 30-day trading window prior to the notice of redemption.
Deal Off with KKR
SiriusXM has agreed to terms that denies them acquiring more than 31.5% of Pandora’s equity securities without the approval of Pandora’s Board of Directors. Pandora struck a deal with a private equity group, Kohlberg Kravis & Roberts (KKR), for $150 million in May of 2017. After the SiriusXM investment, Pandora will terminate their investment agreement with KKR and will pay a termination fee of $22.5 million.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. All information, or data, is provided with no guarantees of accuracy.
Don’t miss out! Stay informed on $P and receive breaking news on other hot stocks by signing up for our free newsletter!
About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.