Pandora Media Inc (NYSE:P) announced its intention to offer, subject to market conditions and other factors, $300 million aggregate principal amount of convertible senior notes due in 2020 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”). Pandora also expects to grantMorgan Stanley & Co. LLC (“Morgan Stanley”), the initial purchaser of the notes, a 30-day option to purchase up to an additional $45 million aggregate principal amount of the notes.Morgan Stanley is acting as sole bookrunner for the offering.

The notes will be unsecured, senior obligations of Pandora, and interest will be payable semi-annually in arrears. The notes will be convertible into cash, shares of Pandora’s common stock, or a combination thereof, at Pandora’s election. The interest rate, conversion rate and other terms of the notes are to be determined upon pricing of the offering.

In connection with the pricing of the notes, Pandora expects to enter into one or more privately negotiated capped call transactions with one or more financial institutions (the “option counterparties”). The capped call transactions are expected generally to reduce the potential dilution to Pandora’s common stock upon any conversion of notes and/or offset the cash payments Pandora is required to make in excess of the principal amount of the converted notes in the event that the market price of Pandora’s common stock is greater than the strike price of the capped call transactions (which will initially correspond to the initial conversion price of the notes and is subject to certain adjustments under the terms of the capped call transactions), with such reduction and/or offset subject to a cap based on the cap price of the capped call transactions. If the initial purchaser exercises its option to purchase additional notes, Pandora intends to enter into one or more additional capped call transactions with the option counterparties. (Original Source)

Shares of Pandora Media closed today at $14.26, down $0.06 or -0.42%. P has a 1-year high of $22.60 and a 1-year low of $11.38. The stock’s 50-day moving average is $14.41 and its 200-day moving average is $16.92.

On the ratings front, Pandora has been the subject of a number of recent research reports. In a report issued on November 25, Wedbush analyst Michael Pachter reiterated a Buy rating on P, with a price target of $26, which implies an upside of 81.4% from current levels. Separately, on November 17, Axiom’s Victor Anthony reiterated a Hold rating on the stock and has a price target of $14.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Pachter and Victor Anthony have a total average return of -4.0% and 15.1% respectively. Pachter has a success rate of 40.8% and is ranked #3448 out of 3644 analysts, while Anthony has a success rate of 63.8% and is ranked #56.

Overall, 2 research analysts have rated the stock with a Sell rating, 8 research analysts have assigned a Hold rating and 9 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $18.08 which is 26.2% above where the stock opened today.

Pandora Media Inc provides internet radio services on smartphones, tablets, traditional computers and car audio systems, as well as other internet-connected devices.