Pandora shares shot up 5.74% in trading on Monday, closing at $US20.83.
The spike happened after Pandora moved closer to a win in its dispute regarding music royalty rates. Pandora claims it should pay lower rates, and today a U.S. copyright official favoured the company’s arguments in an opinion, according to Bloomberg.
Register of Copyrights Maria Pallante supported Pandora’s position in the pending case regarding royalty rates from 2016 to 2020, Bloomberg reports. This turn means it’s less likely that Pandora will suffer a “devastating loss” when the Copyright Royalty Board (CRB) rules in December, Bloomberg analyst Matthew Schettenhelm wrote in a note.
Thomas Claps, an analyst at Susquehanna, called this new development “a significant, positive catalyst for Pandora,” in a note.
Pandora stock jumped as soon as the market opened, and trading had to be temporarily stopped at least twice early in the session because of the rapid rise in shares. The stock rose as high as $US22.60 per share.
Pandora has so far had a strong year, even in the face of a new competitor, Apple Music.
CEO Brian McAndrews has previously said that fears about Apple Music are overblown. “Going forward, we feel really good about our trajectory and competitive position,” he said. “With any big launch like [like Apple Music] and the noise in the marketplace, there could be some users that experiment with it and there could be some short term impact…But we don’t believe that there will be any long-term impact.”
Here is a chart of today’s stock growth:
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