Pandora is burning an epic pile of cash. Rdio has already burnt theirs. Which brings us to the latest music industry acquisition: a $75 million acquisition of a bankrupt streaming music platform by a cash-hemorrhaging streaming radio platform. Seems like a pretty awesome idea!
In its multi-year tenure, Radio achieved virtually zero traction against Spotify, and plunged into bankruptcy as a result despite $125 million+ in financing. Now, the woefully-underperforming Rdio is being plucked out of bankruptcy by Pandora for $75 million, with technology and personnel the acquisition ‘assets’.
A huge question is where this cash is coming from: after massive royalty charges and a questionable $450 million acquisition of Ticketfly, Wall Street is starting to bum-rush the exits on a potential sinkhole. Over the past three months alone, shares of Pandora (P) are down more than 32 percent, with overspending and royalty uncertainties curbing the enthusiasm.
Full story at Digital Music News…