Short sellers hit Pandora as streaming intensifies
10 April 2015 London
Image: Shutterstock
Short sellers are targeting online music streaming service Pandora as the content war heats up, according to Markit Securities Finance.
With new entrants such as rapper Jay Z’s Tidal music service making the streaming market more competitive, short sellers are surrounding old-hand Pandora, one of the oldest services in the business.
The proportion of shares outstanding on loan for Pandora has increased 35 percent in the last three months and now stands at 9.5 percent, a multi-year high for the company, according to Markit. The surge in demand to sell the company short comes after its shares fell more than 40 percent in the last 12 months.
Video streaming service Netflix, meanwhile, has not suffered the same fate, seeing shares outstanding on loan decrease to multi-year lows of 2.3 percent.
“This covering comes as investors’ questions about Netflix’s business model have largely been answered as the firm successfully switched its business model to streaming and started to create its own content,” explained Markit analyst Relte Schutte.
With new entrants such as rapper Jay Z’s Tidal music service making the streaming market more competitive, short sellers are surrounding old-hand Pandora, one of the oldest services in the business.
The proportion of shares outstanding on loan for Pandora has increased 35 percent in the last three months and now stands at 9.5 percent, a multi-year high for the company, according to Markit. The surge in demand to sell the company short comes after its shares fell more than 40 percent in the last 12 months.
Video streaming service Netflix, meanwhile, has not suffered the same fate, seeing shares outstanding on loan decrease to multi-year lows of 2.3 percent.
“This covering comes as investors’ questions about Netflix’s business model have largely been answered as the firm successfully switched its business model to streaming and started to create its own content,” explained Markit analyst Relte Schutte.
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