Pandora plans $231M share offering
sec.gov
sec.gov
Poor stock holders are getting screwed by this. If you are holding, sell as soon as you are able.
I'm always amazed when a company can have such a high share price when it hasn't proven it has a profitable business model.
It's simple probability. You assemble a database of tech companies and their histories -- what happened to them over time, how they were funded, how their stock fared. Then, when you want to evaluate a new company, you compare it to your database, see how other similar companies evolved. You get a statistical sense of the possible outcomes.
Using that data, you invest in companies based on the probability that they will be successful, and the share price is part of the gamble (and it is certainly a gamble). In fact, if you think about it, the fact that the share price is high means other people are doing the same probabilistic calculation and bidding up the price as well.
It's not an accident -- it't a lot of people betting the company will succeed. Obviously by buying the shares, they're also providing the capital that company needs to grow, so it's more than a blind gamble. It's also to some extent a self-fulfilling prophecy.
No it's not.
It's hype, buyout rumors, etc. The stock price will fall hard.
What? He should tell you his investment strategy? These things are secret for a reason. As William Goldman famously said, no one knows anything.
See, the rub is that Pandora shouldn't be evaluated as a single stock, but as part of a broader portfolio. Only amateurs scrutinize individual stocks in this way. As an example, one strategy might be that the investor has determined that internet radio will eventually take off and kill traditional radio. So, as part of a broader investment strategy, you move your money out of traditional radio and into a diversified pool of internet radio business(pandora is just one). If everyone else starts doing this, the stock goes up. It doesn't matter what pandora is doing individually.
Yes, fair enough. You've suggested what's called the contrarian strategy -- find out what people are doing and do the opposite. Sometimes effective, sometimes not.
But the real players (and the people I can't stand) are those who take some kind of position in a stock, then either tout or disparage a company or stock without revealing that only they stand to benefit from the advice they're giving out, and the audience only stands to lose by following it. That's what makes me crazy about most people who offer stock or investment advice -- they're not usually obliged to reveal any conflict of interest that may exist.
> Only amateurs scrutinize individual stocks in this way.
Very true. My only advice is meta-advice -- invest in an index fund, not individual stocks, then sit on your investment. In other words, don't play the market at all, just ride the long-term pattern of equities growth. Avoid thinking you can outsmart all the day traders and insiders. More here: http://arachnoid.com/equities_myths
> No it's not.
Of course it is.
> It's hype, buyout rumors, etc.
And that isn't probability?
> The stock price will fall hard.
That's how reverse pump and dump works -- short a stock, then bad-mouth it to exploit the ignorance of the average investor. Their money ends up in your pocket.
To be clear, the stock hit the all-time high last week (https://www.google.com/finance?q=P today's close 23.99 all-time-high 24.29 last thursday). Most stockholders have made quite a bit