Pandora plunges more than 20% on revenue miss

Pandora plunged sharply after the music streaming company on Thursday reported quarterly revenue that widely missed expectations as mobile advertising growth slowed.

The company posted sales of $268 million, which fell short of Wall Street estimates for $277 million, according to expectations from Thomson Reuters. Earnings matched expectations at 18 cents a share.

Read MoreJay Z wants to take on Spotify and Apple

Shares plummeted as much as 26 percent in extended-hours Thursday following the report, breaking below the IPO price of $16 a share. (Click here to see how Pandora is trading.)

The firm additionally handed in current quarter revenue guidance that disappointed. The company expects revenue of between $220 million and $225 million, versus Wall Street expectations for $244 million.

"We end 2014 in a very good position, with stronger relationships across the music community, record monetization metrics and highly engaged users," said Brian McAndrews CEO of Pandora in a press release. "...2015 will be a year in which we optimize Pandora's potential for long-term growth. We enter the year with energy and focus on what comes next—further migrating radio budgets from terrestrial to digital, defining the future of mobile marketing and advancing Pandora's leading role in the future of the music industry."

Pandora said its total listener hours grew 15 percent to 5.2 billion in the fourth quarter, up from 4.54 billion in the same period a year ago. The company said it has 81.5 million active listeners as of the end of the fourth quarter, an increase of 7 percent year-over-year.