Shares in company plummet after Apple announcement
Apple strikes again.
Shares of Pandora Media collapsed early Friday on reports that the tech giant is planning to launch a rival music service.
Shares of the streaming music company plunged nearly 20% in early trading after the Wall Street Journal reported that mighty Apple, which already controls the market for paid music download through iTunes, is negotiating with record labels to license music for a custom online radio service. It would also compete with others in the space, like Clear Channel’s iHeartRadio and Spotify. The free services let listeners create virtual stations by selecting their own music playlists.
Michael Pachter, an analyst with Wedbush Securities, said a move makes sense for Apple “due to unparalleled cross-selling opportunities” with iTunes and Apple devices. He sees an Apple Internet radio offering allowing users to purchase and download songs virtually instantaneously.