Spooked Momentum Investors Punish Pandora

Despite yesterday's FQ3 earnings statement indicating that Pandora beat Wall Street projections and that it has abundant long-term growth opportunities, Pandora’s stock price fell 11.3% since yesterday to $10.51. This is likely because Pandora lowered its FQ4 guidance to a loss ($0.03) in earnings per share, worse than its $0.02 EPS for last quarter and Wall Street's ($0.02) guidance for next quarter. Investors see Pandora as a momentum story, betting on it gradually but steadily growing towards significant profitability. The slightly grim guidance, due to increased investments which will go towards hiring more sales people, may have spooked some investors with a distaste for any signs of slowing momentum.]]>

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