Pandora Media share slide draws bullish options trade
By Saqib Iqbal Ahmed NEW YORK (Reuters) - Pandora Media Inc shares slid more on Thursday, touching a 52-week low after the Internet radio service operator's disappointing results last week, but trading in the options market showed some expect the share price to recover. Pandora shares have shed nearly a fifth of their value since Oct. 23, when it reported a lower-than-expected increase in listeners in the third quarter. The shares were down 3.3 percent to $18.59 on Thursday. But the weakness prompted some bullish bets on the stock in the options market. Pandora's option volume was heavy and directionally bullish after the stock hit a 52-week low, said Henry Schwartz, president of options analytics firm Trade Alert. A trader bought 6,000 Pandora calls at the $23 strike price and sold a similar number of puts at the $16 strike, both set to expire on Jan. 17, Schwartz said. The net outlay for the trades was $24,000. The profitability of the strategy, called a bullish risk reversal, depends on the stock rising appreciably. Overall options volume on Pandora was brisk on Thursday with more than 23,000 contracts traded by 1:05 p.m. EST, according to Trade Alert data. Volume in calls and puts was nearly even. Pandora’s stock has been pressured in recent months, as listener growth has failed to meet analyst expectations. Despite its huge user base, Pandora faces stiff competition from Spotify, Apple Inc's Beats online streaming service, Google Inc, and Amazon.com Inc in the music streaming business. (Reporting by Saqib Iqbal Ahmed; Editing by David Gregorio)
