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Pandora Will Crash, Then Head to $20 on Apple Radio

Tickers in this article: AAPL FB GOOG P
NEW YORK (TheStreet) -- Earlier this week other sources took credit for breaking the news that Apple will most definitely release a radio product. That's funny because, as recently as this past December, I reported that it's not a matter of if, but when iRadio hits the streets.

(I guess I need to label my stories with a BREAKING NEWS tag and scream, shout and let it all out from the rooftops.)

It's coming. I know this. I have known it for months. And, as somebody who has been following the radio industry since I was in elementary school, I'm telling you that Apple Radio will turn out to be one of the best things that ever happened to Pandora and its shareholders.

If you have owned this stock over the past year, you're up roughly 40% (and, quite possibly as much as 90-plus percent if you bought at rock bottom). For the record, AAPL is down 32% over the last year and about 19% since Pandora bottomed on iRadio rumors and a subsequent guidance low ball over fiscal cliff concerns.

Pandora no longer dips on iRadio news. At least not like it used to. It crashed hard on several mentions of Apple streaming rumors, particularly the first one floated by The Wall Street Journal (or was it The New York Times; it's so hard to keep track). Each and every time, Pandora rebounded, then meandered, stabilized a bit and predictably crashed on more noise. Until this last time.


Pandora earned legitimacy (it feels as absurd to write that as it sounds given the company's more-than-legitimate decade-plus history) on its last earnings report where it, once and for all, squashed all hope for a traditional radio rebirth and established itself as a mobile advertising powerhouse alongside companies such as Google and Facebook .

Pandora will crash again. When Apple officially announces a radio product, Pandora will drop. And then, a few months, maybe a year down the line, Wall Street will come late to reality. Investors will discover that Apple -- whether it has success with radio or not -- had no material impact whatsoever on Pandora's business.


That's because Pandora is a focused company and, if it starts dabbling in areas it has no business or reason to dabble in, Tim Cook will prove Apple is not.