“Pandora Media Inc lowered its fourth-quarter guidance, blaming a pull back by advertisers on the so-called looming fiscal cliff, but analysts suggested it was due more to increasing competition,” Jennifer Saba reports for Reuters. “The outlook on Tuesday rattled investors, sending Pandora shares tumbling 20 percent in after-hours trade, as the company had been steadily increasing its revenue. Last quarter, for instance, it raised its outlook.”
“Pandora relies mainly on advertising for revenue and has been building out its local sales staff in an effort to gain market share among its competitors. January is typically a lighter month for Pandora and is hard to pinpoint spending from advertisers coming off the holiday season,” Saba reports. “Pandora Chief Executive Joe Kennedy said advertisers are being prudent, a change that occurred over the last couple months. ‘We are reflecting the caution we are seeing,’ Kennedy said in an interview with Reuters about the lowered forecast. ‘I think advertisers are nervous.'”
Saba reports, “U.S. legislators are trying to hash out a deal to avoid a $600 billion package of tax hikes and federal spending cuts that would begin on Jan. 1 and could tip the economy into a recession. Pandora’s fiscal fourth quarter ends Jan. 31, which is why the fiscal cliff figures into its forecast, Kennedy said. One analyst questioned how much the fiscal cliff plays into the revised forecast versus the entry of online music companies including Spotify, Sirius XM Radio, and possibly Apple Inc, which are staking out Pandora’s turf. ‘I think the key issue here is that Pandora is facing increased competition in mobile,” said Richard Greenfield, an analyst with BTIG.'”
Read more in the full article here.
The Fiscal Cliff reminds me of Y2K. I am the world will still be here on January 1. If taxes go up, so what, it is not the end of the world. I’d rather the people who ARE working pay more taxes, rather than laying off more people and increasing unemployment. It’s a novel idea, the people who can get jobs help out the ones who can’t. I must be an evil communist. I need to learn a bit more greed to become normal again.
Agreed… I’m so tired of the term “fiscal cliff.” Go off the thing already – at least we’ll have a chance of closing the deficit.