Pandora CEO could soon be out
Shares get a boost as speculation surfaces that co-founder Tim Westergren could be stepping down as CEO
The month of June is near its end, and so may be Tim Westergren’s tenure as chief executive of Pandora Media.
Westergren, one of Pandora’s co-founders, and its CEO since March 2016, will soon step down from the top executive spot at the Oakland-based internet radio company, according to Recode. Westergren also served as Pandora’s chief executive between 2002 and 2004.
A Pandora spokesperson had no comment on the matter, but speculation has swirled for months that Westergren could be on the way out as CEO. Reports in 2016 and 2017 suggested the company was shopping itself around, and some large Pandora institutional investors actively called on Pandora to explore a sale.
A different Pandora started taking shape earlier this month, when it sold a 19 percent stake of itself to satellite radio company Sirius XM for $480 million. As part of that deal, Sirius will get to put three new members on Pandora’s board of directors, including the company’s next board chairman, and it is expected to have a big influence on Pandora’s direction.
“I don’t think it’s a passive investment,” said Michael Pachter, of Wedbush Securities. “I think they will look for ways to help themselves, probably by crosspromoting one another’s brands to their respective audiences. I think that the (stock market) reaction to a rumor of a management change speaks volumes.”
Early Monday, Pandora shares had risen as much as 4 percent as reports surfaced about Westergren’s possible departure. The stock gave back some of those gains, ending the session up by 2.2 percent at $8.46 a share. For the year, Pandora’s shares are down by more than 35 percent.
Westergren will reportedly remain with Pandora in some capacity if he gives up his CEO seat. Prior to taking over from former CEO Brian McAndrews last year, Westergren had been Pandora’s chief strategy officer.
“Pandora’s mistakes are simply too large to ignore, and ultimately the mistakes point to one person, founder and current CEO, Tim Westergren,” said BTIG analyst Richard Greenfield, in a recent report in which he laid out evidence suggesting Sirius, and its own parent company, Liberty Media, may look to replace Westergren as Pandora’s CEO.
Pandora also was late to the game in introducing a true, ondemand and ad-free subscription streaming service.It finally launched its $10-a-month Pandora Premium offering in March of this year.
By then, Spotify was already touting it had 50 million paying subscribers every month, while Apple Music claimed 20 million paying subscribers a month for its on-demand service.