Yesterday streaming music service Pandora (NYSE:P) announced that it was replacing CEO Brian McAndrews with founder Tim Westergren.
“Tim is a visionary who forever changed how music is enjoyed by leading the development of Pandora’s Music Genome Project in the early 2000s. A seasoned entrepreneur, and former band member and composer himself, Tim is personally committed to advancing the careers of working musicians everywhere,” said the company in a press release.
“Tim has been a strong and highly engaged leader throughout Pandora’s history and has been deeply involved in the company’s growth strategy and evolution. He also plays an essential role in engaging employees, listeners, music makers, advertisers and partners,” the statement said.
In addition to ousting McAndrews, Pandora has changed its management structure with key staffing changes. Mike Herring will serve as Pandora’s president and CFO, Sara Clemons will be the chief operating officer, and Chris Phillips will serve as the company’s chief product officer.
“I am incredibly excited about the future of Pandora. We’re 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. I’m 100 percent committed to Pandora’s growth strategy, as is our executive team and Board,” said Westergren of his appointment by the board.
Following the announcement Pandora shares dropped 12% to $9.60, reports USA Today. At 11 a.m. Eastern today, the price had dropped even further to $9.23 per share. Pandora did not address its potential sale in the announcement.
Insider Take:
Despite the “warm and fuzzy” good-bye and thank you to McAndrews in Pandora’s announcement, it is no surprise this vocal CEO got the boot. As we reported last month, Pandora is losing about $10 million a month, and its valuation now stands at about $1.8 billion, compared to $7 billion just two years ago. In addition, at year end, Pandora posted a $169.7 million loss. No company can continue at that pace and stay in business, no matter how good its product or service.
Last month the New York Times reported that Pandora had met with Morgan Stanley to identify potential buyers for the company. Could the management changes be a condition of a possible sale, or perhaps Pandora is trying make itself more appealing to a potential buyer with a little spring cleaning? The management changes are certainly a good start, but Pandora has a long way to go before anyone, except maybe a competitor, would take such a risk.
~ Dana E. Neuts, Subscription Insider