Hedge fund Corvex Partners has revealed that it owns 10 per cent of the veteran streaming music company – and that selling out to a larger company is preferable to pursuing a "costly and uncertain business plan."
In a US Securities and Exchange Commission filing, Corvex expresses dismay over the return of founder Tim Westergren as CEO.
The hedge fund doesn't think it's worthless – just that it would be worth more to shareholders if it sold now at a premium.
"Pandora's logged-in mobile user base, deep reach and engagement, and differentiated song recommendation engine are unique assets, and we believe a large, well-capitalized acquirer could further accelerate the company's competitive advantages over time through synergies in areas such as technology and engineering, ad monetization, and customer acquisition and marketing.
Simply put, we believe Pandora can become an even more differentiated product and a more valuable business as a part of a larger enterprise," Corvex notes.
Corvex points out that Pandora has made only modest gains since IPO relative to the market.