After the latest earnings report from Pandora, the Fast Money desk cautions individual investors to be wary not only of Pandora , but of all social media stocks.
Looking at the headline numbers, Pandora looks impressive – and that’s part of the problem.
The company grew its quarterly revenue 71 percent and its ‘listener hours’ 99 percent over the year-ago quarter. That's bullish right? Nope.
Dig down and you’ll find, “Content acquisition costs are rising – increase costs are a problem,” says Jon Najarian.
Also, the company’s quarterly revenue came in at $81.3 million, nearly two million short of expectations, and the company reported a three cent loss, a penny more than Wall Street projected.
As a result shares plunged 15 percent in the after hours.
And the Fast Money desk thinks those kinds of sudden moves will become the new norm as more social media stocks hit the market.