Pandora's CEO, Chairman, and President Joe Kennedy will resign from leadership of the company following yet another quarterly loss. Pandora's board of directors announced that it begun a search for a successor and that Kennedy would continue to lead the company through its transition.
"As I near the start of my tenth year at the helm of Pandora, I am incredibly proud of the team and what we have accomplished in redefining radio. As part of our Board discussions of the road that lies ahead, I reached the conclusion and advised the Board that the time is right to begin a process to identify my successor," Kennedy said in a press release from Pandora. "There is a tremendous market opportunity ahead and I look forward to continuing to work with all the great people at Pandora to keep driving the business forward."
Since its big IPO in 2011, Pandora has only posted a quarterly profit twice
The fact that Kennedy had no successor, that the announcement came during Pandora's quarterly earnings call, and that the company has not yet engaged a search firm to identify potential replacement candidates all suggest that Kennedy's and Pandora's board's decisions to announce his resignation were sudden.
Pandora's press release for its quarterly earnings was upbeat, trumpeting record revenue of $125.1 million for the quarter and $427.1 million for the year. But the company also lost 9 cents per share for the quarter and 23 cents per share for the year on a GAAP basis, its widest loss ever.
Pandora "now effectively the largest radio station in almost every major market"
"We continue to monetize mobile at record levels and exceeded our expectations for the quarter," Kennedy said in the earnings release. "We are now effectively the largest radio station in almost every major market and begin fiscal year 2014 with extraordinary momentum."
The losses were smaller than Wall Street expectations, but after so many quarters of losses from Pandora, beating an even more frugal analysis wasn't enough for Kennedy to keep his job.
Pandora Media Inc. went public in June 2011, in the middle of what Bloomberg called the "biggest internet IPO boom year since 2000." After opening at $16 per share, Pandora's stock initially jumped to more than $20, but to date has never reached that initial price again. Since going public, Pandora has only posted a quarterly profit in two of ten quarters.
Lawmakers joked that Pandora's bill should be called the "Unfairness Act" or the "Paycheck Reduction Act"
Lately, Kennedy and Pandora were as well-known for their lobbying efforts as for internet radio. But under Kennedy, Pandora's attempts to convince Congress that webcasters need a reduction in the royalties they pay for music had largely flopped. Pandora has long complained that the company is burdened by the high costs of music. Kennedy argued that it was imperative to the company's financial health that legislation known as the Internet Radio Fairness Act (IRFA) be passed.
Last November, a House subcommittee held a hearing on IRFA, with Kennedy among those who testified. It quickly became evident that Pandora and the other IRFA supporters hadn't come close to enlisting enough support to get the bill passed. Some lawmakers joked that Pandora's bill should be called the "Unfairness Act" or the "Paycheck Reduction Act."
Greg Sandoval contributed to this report.