Pandora Media shares slumped more than 6% Tuesday, after FBR & Co. downgraded the stock to underperform from market perform, and cut its price target to $11 -- or 41% below its current trading level. "We see the service as providing a quality consumer experience with solid revenue potential, but see a meaningful risk of debilitating cost structures emerging from the Copyright Royalty Board's process of setting 2016-2020 performance fees," FBR analysts wrote in a note. There is a strong risk that rates could be reset to debilitating levels, they wrote. Pandora's 70% share of the Internet radio audience is substantial, but it is facing formidable competition from the likes of Apple , Microsoft and Google . Shares are down about 30% in the year so far, while the S&P 500 has gained about 12%.
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