Pandora Media Inc. shares rose as investors bet that its newest chief executive may have better luck than his predecessors in reviving the struggling online music company.
Pandora said late Monday that it hired Roger Lynch as its fourth leader in less than two years. Lynch has worked at Dish Network Corp since 2009, most recently overseeing Sling TV, the largest online TV package in the marketplace.
Once the top music streaming service in the world, Pandora’s user base has stopped growing as consumers flocked to new on-demand listening alternatives Spotify and Apple Music, both of which offer huge catalogs of songs.
Pandora was late to build a competing service, introducing Pandora Premium earlier this year. In June, the company sold a large minority stake to satellite radio company Sirius XM Holdings Inc. and sold its ticketing business to raise money to cover costs. Sirius is getting three seats on Pandora’s board, including the chairmanship.
“A well-regarded CEO is an important first step,” Barton Crockett, an analyst at FBR Capital Markets & Co., said in a note to clients. “As a ‘founding CEO’ of Sling, the 54-year-old Lynch spearheaded the January 2015 launch that made Sling a credible first mover and leader in over-the-top skinny video bundles.”
Pandora rose as much as 4.7 percent on Tuesday, the most intraday in more than six weeks, and was trading up 3.1 percent to $8.32 as of 9:48 a.m. in New York. Before Tuesday, it had declined 38 percent this year.
Dish was the first large pay-TV provider to introduce what’s known in the industry as a skinny bundle — online TV services that offer fewer channels at a lower cost than your average cable package.
Lynch’s appointment is effective Sept. 18, Oakland, California-based Pandora said in Monday’s statement. Pandora also said Michael Lynton, the former CEO of Sony Entertainment, will join its board.
“There weren’t a lot of people being floated as candidates, but it’s surprising they’d take someone from pay TV,” said Amy Yong, an analyst at Macquarie Capital USA, who has a neutral rating on the stock. “If they were trying to be standalone for a while, they’d make a statement hire.”
Co-founder Tim Westergren stepped down in June after a little more than a year in the top job, and was succeeded on an interim basis by Naveen Chopra. With Lynch’s hire, Chopra will return to his position of chief financial officer full-time, the company said.
Rival music services Apple Music and Spotify have funded the creation of original videos, a step Pandora has thus far avoided. The company has had its hands full repairing its relations with record labels and artists. Lynch plays lead guitar in a band called The Merger that is about to play as the Aspen Jazz Festival.
The company has said a main priority will be to increase advertising sales.
“Roger brings a stellar leadership reputation, a wealth of consumer experience, and a lifelong passion for music to Pandora — all of which are critical ingredients in the continued evolution of our company,” Roger Faxon, Pandora’s chairman, said in the statement.