Streaming Internet music service Pandora (NYSE:P) surged more than 40% and quickly surpassed $20 a share in its debut on Wednesday, signifying strong demand for a company that has yet to make a profit.
The upbeat start for Oakland, Calif.-based Pandora comes after the companys initial public offering of 14.7 million shares of common stock priced at $16 a share late Tuesday, well above the price target range of just $10 to $12.
Shares of Pandora, which began trading on the New York Stock Exchange under the symbol P, were recently up 42.66% to $22.75. At one point, they surged as high as $26.
Pandoras debut underscores Wall Streets fascination with Internet companies like Facebook, Groupon and LinkedIn (NYSE:LNKD), which last month became the largest U.S. Internet IPO since Google (NASDAQ:GOOG).
Founded in 2000 by chief strategic officer Tim Westergren, Pandora allows users to generate online playlists based on their favorite artist or song. The company, which has more than 80 million registered users, uses its Music Genome Project to play songs with similar characteristics.
However, Pandoras IPO values the company at nearly $4 billion, a lofty price tag considering it has never been profitable.
While Pandoras revenue more than doubled last quarter to $51 million, its net loss increased to $6.75 million and it has warned it expects to post losses at least through January.
The IPO is being run by Morgan Stanley (NYSE:MS) and JPMorgan Chase (NYSE:JPM).