Category Archives: oud

Pandora Founder Tim Westergren Returns As CEO, Stock Hits Sour Note

Pandora Media ( P ) surprised Wall Street on Monday by announcing that current CEO Brian McAndrews is out, to be replaced by co-founder and former CEO Tim Westergren, even as buyout rumors continued to swirl around the Internet music company. Pandora, the top music streaming service, is facing increasing competition from Apple ( AAPL ) Music, privately held Spotify, Amazon.com’s ( AMZN ) Prime Music and Google Play Music, a unit of Alphabet ( GOOGL )-owned Google. Pandora stock was down more than 9% in midday trading in the stock market today , near 10. Pandora stock is down nearly 40% in the past 12 months and slid to an all-time low of 7.10 on Feb. 12 over concerns about competition from Apple Music and others, as well as the company’s slowing user growth and engagement. In a statement, Pandora said Westergren will take over immediately from McAndrews, who has been Pandora’s CEO for less than three years. Westergren co-founded the Internet radio company 16 years ago and served as CEO from 2002 to 2004. “The CEO change came as a surprise, and the timing certainly isn’t optimal from a perception standpoint, given that Pandora’s share price had been rebounding from its 52-week lows,” said Stifel analyst John Egbert said in an industry note Monday. “It’s unclear what the root cause of the change was, whether it was driven by the board, Mr. McAndrews’ decision to leave, or Mr. Westergren’s strong desire to return to an operating role.” Stifel, however, mainted a buy rating and price target of 16 on Pandora stock. In the company’s statement, Westergren said Pandora is “on the cusp of realizing an extraordinary vision: fundamentally changing the way listeners discover and enjoy music, and the way artists build and sustain their careers. We are pursuing a once-in-a-generation opportunity to create a massive, vibrant music marketplace. We have the audience, the technology infrastructure, the monetization engine and most importantly the right team with the passion and commitment to do it.” In other changes, Pandora CFO Mike Herring will now also serve as president, overseeing revenue, licensing, finance, legal and IT functions. Sara Clemens will now serve as Chief Operating Officer after previously serving as Chief Strategy Officer and will oversee Ticketfly, the live-event and ticket sales business that Pandora acquired last year to expand its offerings and take on rivals Apple Music and Spotify. Also, independent board member Jim Feuille takes over from Westergren as chairman. In the near term, Pandora will see higher content acquisition expenses, say analysts, following a ruling in December from the Copyright Royalty Board. This panel determines the rate to be paid to music labels and artists each time one of their songs is played on the Internet, under a statutory license for the period stretching from Jan. 1, 2016, to Dec. 31, 2020. Pandora on Thursday said it was expanding the size of its board from nine seats to 10, with the addition of Anthony Vinciquerra, He is a senior adviser with private equity firm TPG (formerly Texas Pacific Group), in its technology, media and telecom group. According to Dealreporter, Pandora is attracting buyout interest from such companies as Amazon.com, Alphabet ( GOOGL )-unit Google and Yahoo ( YHOO ). The New York Times reported in February that Pandora was “working with Morgan Stanley to meet potential buyers,” and has held talks about putting itself up for sale. Shares of Apple, Alphabet and Amazon were all down a fraction in midday trading Monday.

Could Intel Undercut Apple Supplier Qualcomm In iPhone 7?

Intel ‘s ( INTC ) dogged mobile pursuit — to the tune of “billions of dollars” lost — will pay off with an Apple ( AAPL ) iPhone 7 modem chip, a Barclays analyst wrote Monday as he downgraded modem rival Qualcomm ( QCOM ). Radio-frequency systems supplier Qorvo ( QRVO ) wins in the Intel model, scooping rival Skyworks Solutions ( SWKS ), Barclays analyst Blayne Curtis wrote in a research report. But Intel’s Apple iPhone share will likely be a minority, with 10%-20%, as a second source. The No. 1 chipmaker Intel hasn’t been used in an iPhone since the 2008 3G iteration. Apple last dual-sourced a key component — the processor — in the iPhone 6S, pitting Taiwan Semiconductor Manufacturing ( TSM ) against Samsung. Samsung has since backed off the A10 processor, yielding to Taiwan Semiconductor, analysts say. Midday on the stock market today , Qualcomm stock was down more than 1.5%, while shares of Intel and Apple were little changed. Skyworks stock was up 0.8%, while Qorvo stock was down 0.4%. Figuring on 20% share of the iPhone 7, Intel would add 3 cents earnings per share ex items per quarter vs. a 13-cent Qualcomm decline, Curtis wrote. Curtis downgraded Qualcomm stock to equal weight from sector weight and cut his price target to 50 from 55. “We clearly underestimated Intel’s ability to lose billions of dollars in this pursuit of mobile, but we also thought Qualcomm would make a larger effort to monetize the modem business it still has,” Curtis wrote. Qualcomm likely won’t be able to innovate back to 100% share of the iPhone modem business, Curtis wrote. Its faster modem, the Snapdragon 820, comes with a lower average sales price and higher costs. “If Qualcomm can’t fix that problem, then this would be bad business for both companies unfortunately,” Curtis wrote. On the radio-frequency side, Qorvo wins in the Intel model, gaining 3% share vs. its iPhone 6S offerings, he wrote. In an 80%/20% Qualcomm-Intel split, Qorvo gets a pair of power amplifiers and the envelope tracking chip, undercutting Skyworks. Curtis forecasts Qorvo’s iPhone 7 share to rise 3% to $4.92 vs. $4.80 in the iPhone 6S. He boosted his price target on Qorvo stock to 50 from 46. But even at 50% penetration for Intel, which he calls unlikely, Skyworks still gains share, Curtis wrote. At the 80%/20% split, he expects Skyworks’ iPhone 7 chip content to rise as much as 20% to $6.82 per phone, up from $5.69 in the 6s. Curtis sees Broadcom ‘s ( AVGO ) contribution growing 27% in the iPhone 7 to $8.05 worth of content, vs. $6.35 in iPhone 6S. A three-year supply agreement between Broadcom and Apple will likely leave Qorvo, Skyworks and Japan’s Murata Manufacturing scrambling for share, he wrote.

Gilead Sciences Stock Rises As Analysts Still Like HCV Franchise

Big biotech Gilead Sciences ( GILD ) hit a two-month high Monday after two analysts delivered bullish outlooks for the company. On Sunday, RBC Capital Markets analyst Michael Yee lifted his Q1 EPS estimates due to a stock buyback and noted several recent pieces of “incremental” good news. For one, he cited late Friday the successful patent suit brought by Merck ( MRK ) and Ionis Pharmaceuticals ( IONS ), which had resulted in a somewhat lower damages award ($200 million) than Wall Street had expected. He also noted that weekly prescription data from IMS Health ( IMS ) suggest Gilead’s hepatitis C drugs, Sovaldi and Harvoni, were holding up reasonably well in the face of competition from Merck’s Zepatier, which launched in late January. This point was made more emphatically Monday in a research note by Leerink analyst Geoffrey Porges, who called Merck a “pretender to the HCV (hepatitis C virus) throne.” Porges noted that a survey of top payer plans backed this up. “Seven weeks after the launch of Zepatier, Sovaldi and Harvoni retain a relatively favorable position in 65% of the top 20 largest commercial plans and 70% of the top 10 largest government plans relative to AbbVie ’s ( ABBV ) Viekira Pak (20%, 30%, respectively) and Zepatier (0%, 10%),” Porges wrote. “Further, in the top 20 Medicare plans, while Harvoni is covered by 100% of plans, 85% of plans do not cover Viekira Pak, and none cover Zepatier.” Porges affirmed his outperform rating on Gilead stock, with a price target of 127. In midday trading on the stock market today , Gilead stock was up more than 2%, near 93, and earlier rose above 94. The stock has climbed about 14% from the 20-month low it hit on Feb. 2, but still has a weak IBD Relative Strength Rating of 29, meaning the stock’s performed in the lowest 29% of all stocks the past 12 months, with an emphasis on the most recent six months. Merck stock was down a fraction midday Monday.