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What: Shares of Pandora Media gained 18.7% in May 2016, according to data from S&P Global Market Intelligence
So what: Pandora had ended April on a high note, rising 5% on the last trading day thanks to a strong earnings report
Then, on May 16, hedge fund Corvex Management disclosed a 9.9% share of Pandora's voting stock. Corvex doubled its Pandora stake in the space of six weeks, becoming the company's largest shareholder. And the fund is not content with just sitting on its Pandora shares. Corvex had been talking to Pandora executives and would prefer the company adopt a new strategy. Specifically, Corvex wants Pandora to look for a buyer and unlock shareholder value through a high-priced sale of the company.
From there, Pandora shares have only been climbing as investors consider the potential for a generously priced buyout.
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Now what: Recently, a firm co-owned by Pandora Chairman Jim Feuille increased its Pandora holdings by 3.6%. That's a modest vote of confidence in the proposed sale strategy.
Neither Pandora's board nor Corvex Management has come up with any firm offers so far, leaving all of this in the realm of speculation. As a Pandora shareholder myself, I would be content with a media-free buyer as outlined above -- but I'd still prefer to see Pandora go its own way and build a stand-alone music business for the long term.
The article Why Pandora Media Stock Rose 18.7% in May
Anders Bylundfree for 30 daysWe Fools may not all hold the same opinions, but we all believe that considering a diverse range of insightsdisclosure policy Copyright 1995 - 2016 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy
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