Pandora (P): Often, to get past visions of a stinker stock, you need vision. Today, several issues dog Pandora. First, how can it offset the crazy amount of cash it must put toward music royalty fees by maximizing advertising and subscription revenue? And how can the company expect to compete alongside terrestrial radio and Sirius XM (SIRI) satellite radio in the face of data usage caps and an in-vehicle connection that takes an extra step to execute relative to the aforementioned other two options?
Both questions are excellent. I have more where they came from. Despite my original contention that I would not touch P with somebody else's 10-foot pole, I think the stock is a mid- to long-term buy.
First, the day will come when your car serves as nothing but a rolling tablet PC. While I am not particularly keen on the whole idea, it's coming. Push a button and there's Pandora. There's too much consumer pressure mounting that data caps might soon become a thing of the past ... again. The trend of setting limits will reverse itself, rather abruptly, relatively soon. It might sound crazy in today's environment, but that's where the vision comes in. Who would have thought 10 years ago that society would walk around with its collective eyes glued to an iPhone? Even the great William Gibson did not see that coming.
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