SiriusXM Seen Benefiting From Pandora Stake
Analysts reacted positively in Monday notes to investors on SiriusXM’s $480 million Pandora stake (see 1706090005), viewing it as validation of the music streamer's advertising-supported business. BTIG has "long been skeptical of Pandora’s potential as a standalone business,” said Brandon…
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Ross, acknowledging the “potential strategic value” Pandora brings to SiriusXM and to Liberty Media, which owns 65 percent of SiriusXM. Through the Pandora investment “or an eventual acquisition,” he wrote, “we hope that SIRI can learn how to succeed in the mobile world.” SiriusXM (SIRI) needs to become more like its mobile competitors at collecting and using data, said the analyst, saying the connected car is more future risk to the satellite radio provider than benefit. Macquarie Capital views SiriusXM as the “greater winner” from the investment, given the deal’s structure and the voice the company will have in Pandora’s strategic direction with addition of three board members, wrote Amy Yong. Wedbush Securities' Michael Pachter expects Pandora subscriptions to grow and “contribute meaningful leverage and profitability” when they reach critical mass. He sees potential inclusion of Pandora in SiriusXM’s product offerings as a way for the satellite firm to provide “a more interactive experience” to its 30 million-plus subscribers. A SiriusXM weakness has been “lack of on-demand listening," Pachter said.