Pandora just took a $30 million loan ahead of its IPO. That's on top of $86 million it took in venture capital and accrued unpaid dividends. Luckily for Pandora's users, the indispensable internet radio service can't be killed, debts notwithstanding.
Sure, Pandora lost nearly $7 million in the first quarter of this year thanks to licensing fees and a staff roster that grew 20 percent in three months, as the New York Post reports. At that rate, the $30 million Pandora borrowed from its IPO underwriters JP Morgan and Morgan Stanley won't last long. But hopefully Pandora will raise enough money from its initial public stock offering to pay back the $30 million it is borrowing, plus another $30 million in accrued unpaid dividends it owes other investors, plus whatever cushion it needs to put in the bank. LinkedIn, after all, just raised $352 million in its IPO, despite selling a far less compelling product.
Besides, it has proven impossible to drive a stake through Pandora's heart. The Oakland, California based startup has been plugging away since the late 1990s, surviving the first dot-com bust in part by begging employees to work for free (for months at a time) and maxing out 11 credit cards. And it has stared down several royalty and regulatory issues that threatened to destroy its business model. It is like the internet's cockroach. A very intelligent, delightful sounding cockroach.
[Image of Pandora HQ via Thomas Hawk/Flickr]