Pandora Files with SEC for IPO
Despite unforeseen circumstances in royalty fees, internet radio stations including Pandora have reached a settlement with the CRB at 25% of U.S. gross revenue. Even with large concessions by the CRB, Pandora Media Inc. has yet to makea a profit within the last three years. The company has increased revenues by 276% from 2008-2010 or 6.51% geometrically over the last three years. The company believes that this increase in capital will allow the firm to grow its user base and increase its advertising revenues as copyright fees continue to decline; however, the prospectus clearly indicates that new investors will face substantial dilution as a result of old investors receiving a premium over what they paid for their shares.
-Michael Alfaro
Bernanke to maintain QE2 until June
Ever since the Federal Reserve announced its plan to buy long term bonds on August 10 of last year, the S&P has increased by 17.21 percent, unemployment has decreased from 9.60 percent to 9.00 percent and the consumer spending index has increased from 42.9 to 44.9. Yet, the Federal Reserve Chairman Ben Bernanke still believes that further stimulus is needed to sustain the economic recovery. Some ways the Fed plans to achieve this is by keeping the federal funds rate near zero and continue its policy of Quantitative Easing of $600 billion until June.
In his address to the Committee on the Budget of the House of Representatives on Wednesday February 09th, Bernanke addressed the concern about inflation by stating:
“Indeed, prices of many industrial and agricultural commodities have risen lately, largely as a result of the very strong demand from fast-growing emerging market economies, coupled, in some cases, with constraints on supply. Nonetheless, overall inflation is still quite low and longer-term inflation expectations have remained stable.”
-Wellington Rodriguez
Sources
- Board of Governors of the Federal Reserve System, The Economic Outlook and Monetary and Fiscal Policy, By Chairman Ben S. Bernanke.
- Bloomberg News
Article submitted by: Michael Alfaro and Wellington Rodriguez of the Capital Markets Lab. To learn more about the Capital Markets Lab please visit https://business.fiu.edu/capital-markets-lab/.