Pandora shares whipsawed in after-hours trading on Monday, after it announced a $150 million investment and mixed financial results, and said that two board members would resign as the company gears up for a potential sale.
The stock initially bounced between gains and losses of nearly 5 percent after hours.
KKR — an investment firm known for its private equity and hedge funds — will invest $150 million in Pandora in exchange for new shares of preferred stock, the companies said on Monday. KKR could up the deal, which must be reviewed by regulators, to $250 million, the companies said.
KKR's Richard Sarnoff will also join Pandora's board — but two other directors will leave. Venture capitalist James M. P. Feuille and technology investor Peter Gotcher will resign from Pandora's board, and a committee will appoint new directors, Pandora said.
"Having secured a significant financial commitment from KKR to strengthen the Company's balance sheet, we have positioned the Company to evaluate any potential strategic alternatives, including a sale, in the 30 days before the financing is set to close," outgoing director Feuille said in a statement.
With more competition than ever, the streaming company has faced challenges turning a profit. Corvex Management, a hedge fund run by Keith Meister, had previously pushed Pandora to sell some of its assets, while SiriusXM has been suggested separately as a potential buyer.
Still, Pandora lost less money per share than Wall Street was expecting in the first quarter.
Pandora posted an adjusted loss of 24 cents per share, excluding items, on revenue of $316 million on Monday. That's compared to 34 cents per share on revenue of $318 million expected by a Thomson Reuters consensus estimate. The results showed a 6 percent revenue increase from a year ago.