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Pandora Media Inc., the Internet-radio company, raised $234.9 million in its initial public offering after pricing the shares above the top end of the marketed range.
The company sold 14.7 million shares at $16 each, according to data compiled by Bloomberg, after offering them for $10 to $12. The shares will trade on the New York Stock Exchange under the symbol P.
Pandora boosted the size of its offering 43 percent last week to meet demand, adding 1 million shares and increasing the price from a range of $7 to $9. The company, which has lost $92 million since 2000, joins a spate of recent Internet IPOs, including a planned $750 million offering from Groupon Inc. and an expanded sale last month from LinkedIn Corp.
Although Pandora will compete with peers such as Sirius XM Radio Inc., the subscription-based satellite-radio service, it may face a bigger risk staying ahead of established technology companies that include Apple Inc., Amazon.com Inc. and Google Inc., which are investing in their own online music offerings.
In addition, startups such as Slacker Inc. and Rdio Inc., as well as CBS Corp.'s Last.fm, are providing competition by offering music through the Internet.
Spotify Ltd., the London-based online-music provider that's available in seven European countries, has reached agreements with three major record labels and is close to a deal with a fourth to begin a U.S. service, which reportedly could start as soon as next month.
Founded in 2000 by Tim Westergren under the name Savage Beast, Pandora makes 87 percent of its sales from advertisements that target users based on age, gender, home postal code and musical taste. Ads support the free radio service, though the company also sells subscriptions to users who prefer to listen without advertising.
Pandora planned to sell6 million of the shares in the IPO, while existing shareholders planned to offer 8.7 million, according to the filing. The company's proceeds, estimated in the filing to be about $58 million after underwriter fees, will be used to pay more than $30 million of accrued dividends and for general corporate purposes.
Hearst Corp., the New York-based publisher, planned to sell 4.4 million shares to pare its stake to 2.7 percent from 5.7 percent, the prospectus showed. The largest shareholders, Crosslink Capital, Walden Venture Capital and Greylock Partners, didn't plan to sell shares in the IPO.
Morgan Stanley, JPMorgan Chase and Citigroup led the offering.