Pandora seeks $140 million in IPO

Company's target share price of $7 to $9 is a 40 percent increase over what it said it expected to raise when it first broached the topic in February.

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Steven Musil
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Pandora signaled today that its initial public offering was imminent, in a regulatory filing that placed the company's target price between $7 and $9 a share.

At the high end, the Internet radio company would raise nearly $142 million on the sale of 13.7 million common shares, according to the filing with the Securities and Exchange Commission. That's a 40 percent increase over the $100 million the company said it hoped to raise in its February SEC filing and would value the Oakland, Calif.-based company at between $1 billion and $1.4 billion.

Founded in 2000 by Tim Westergren, the wildly popular Pandora uses a "music genome" algorithm to create custom radio stations based on a single song or artist and offers paid subscriptions as well as a free, ad-supported version and a suite of popular mobile apps.

Pandora has 90 million registered users, who streamed approximately 3.8 billion hours of radio listening last year. However, the company has yet to turn a profit; it recorded $51 million in revenue during the first three months of 2011 but a loss of $6.7 million, according to today's SEC filing.

Morgan Stanley, JPMorgan Chase, and Citigroup are the lead underwriters on the deal, the proceeds of which will be used to pay accrued and unpaid dividends and for general corporate purposes. The company will trade on the New York Stock Exchange under the stock symbol "P."

The filing comes as interest in technology IPOs is heating up again. Daily-deals company Groupon filed for an IPO today with hopes of raising $750 million. Professional-networking site LinkedIn, which went public two weeks ago, raised $352 million in its IPO, and has a current market capitalization of $7.4 billion.