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Pandora's IPO Prices Through the Roof — $16 a Share

Online-radio service Pandora priced its IPO at $16 a share, far higher than expected, putting its market cap at $2.6 billion.

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The company's value has been quickly inching up on the heels of LinkedIn's IPO — today's price is up from the $10-$12 per share the company floated last week, which was three bucks higher than the range the company proposed the prior week.

The company sold 14.7 million shares ahead of its first day of trading on the New York Stock Exchange.

The bull case is compelling: Pandora is big, with 90 million listeners, adding another one (on average) each second. The company controls half of the streaming Internet-radio business and the potential market for addressable advertising, which Pandora does, is huge — $24 billion. Plus, there's room for International expansion.

As for the bears, well, investors don't seem concerned about arguments that Pandora's overvalued. One big challenge for Pandora: It can't achieve economies of scale — its licensing fees rise right along with its listeners. Plus, it faces a slew of competition, most recently from the likes of Amazon and Apple's new cloud-music services, plus smaller companies like Spotify, which is planning to launch in the US.

Wednesday we're sure to see a huge trading day for Pandora. On the heels of LinkedIn's big pop at the open it seems safe to assume Pandora will open higher than $20 per share.

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