Pandora Media Inc. appears to be the hot-ticket item, as far as stocks go right now.
According to the New York Post, Verizon is considering making a $100 million investment in Pandora if the music streaming company fails to reach a deal with Sirius XM this week. But Verizon isn’t the only company with their eye on Pandora. Just last month, private equity firm KKR made a $150 million investment in Pandora.
“We buy a company and look at what we can do to make it better,” said Henry Kravis, co-founder of KKR. “How can we improve operations? Maybe it’s fixing the pricing or the supply chain, or putting the proper metrics in place so we can better measure what the company is doing. Maybe we have to change some of the company’s management. To me, there’s so much more to investing than buying low and selling high.”
But there is a catch: as part of the $150 million investment deal, Pandora agreed to sell itself within 30 days—and that 30-day deadline is tomorrow.
If Verizon is truly interested in acquiring the company, the chances of a buyout are looking pretty good. During an investor conference last week, Sirius XM CFO David Frear hinted that the company wasn’t likely to reach a deal with Pandora.
“With respect to all the chatter about acquisitions, you have to look at them as sort of being not very likely,” Frear stated.
As a result of all the uncertainty, Pandora shares are currently down by about 13 percent. But that’s a common phenomenon whenever an acquisition is in the works. Share values are expected to rebound as soon as a deal is reached.
In the meantime, Verizon has yet to confirm whether they are going to make an offer. As of now, the company’s rumored $100 million investment interest is all hearsay. Investors will know by tomorrow what the future of Pandora will bring.
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