Pandora (P) has been absolutely terrible lately. I was really under the belief we would be closer to $9.00 per share as we approach earnings next week. Boy, was I wrong! It just keeps getting worse and I own 2000 shares along with 80 (another 8000 shares) Jan call options. Luckily, for my portfolio, I was smart enough to protect the 2000 shares using the $8.00 PUT for next Friday’s expiration (the day after earnings).
Earnings November 2nd
UPDATE: After writing this post I was reviewing my positions and realized Pandora has moved their earnings release date from October 24th to November 2nd. I’m not sure who got it wrong originally, but for a bit I was thinking I was losing it until I found other articles with the October 24th date. This is why I own the Oct 27th $8 PUT options and now I’ll be forced to roll them out to November 7th (I believe). I hate it when plans change!
If Pandora blows earnings and it continues to tank, I’m going to be forced to exercise my put options and get out of the stock. My max loss is $480.00 and I’m already past that so I will actually be better off next Friday than I am today if I am forced to exercise.
Keep in mind there is a huge short position in Pandora so if they beat or there is good news we could see a serious short squeeze (hence the 80 calls).
Pandora Has an Identity Crisis
Pandora is suffering, in my opinion, because it’s not cool anymore. Too many “parents” or those of us in that older age group use it and the kids see mom and dad using it and that’s just taboo! That’s my thought and I could be completely wrong, but Pandora is just old. It should be bought and rebranded.
Not From a Lack of Trying
Pandora is a great product. Their new premium service is excellent, the mobile app overhaul is great and the sound quality is not only improved, but has always been excellent as well. There is nothing wrong with the service or product…it’s just not cool anymore.
My view is simple: I like the product, but I’m getting tired of fighting a downhill spiral. If earnings disappoints next week I’m out (unless something weird is said in the conference call). Will I lose money? Absolutely. Would I buy it back? Not unless something fundamental changes. I do believe they’re slowly becoming a buyout target and I think someone should definitely buy them. That’s not a reason to invest however. If you’re profitable on Pandora take the gain and get out. If you’re upside down like me then we have one more shot next week.