Pandora Media Inc.'s initial public offering Wednesday was a hit for private equity investors, including Crosslink Capital, Walden Venture Capital, Greylock Partners, Labrador Ventures and Granite Global Ventures, which together owned 69% of the Internet radio company.
Pandora raised $235 million, selling 14.7 million shares at $16 each, according to Renaissance Capital, an investment research and money management firm.
The venture capital managers didn't sell any stock in the IPO, according to a Pandora prospectus, filed with the SEC. Crosslink owned 22.92% of the stock before the IPO; Walden, 18.67%; Greylock, 14.06%; Labrador, 8.46%; and GGV, an affiliate of Granite, 5.15%, according to the filing.
“The venture capital investors didn't sell on the offering,” said Matt Therian, research analyst with Renaissance Capital. “It's reassuring” to the market, indicating the investors see a positive outlook for the company, he added.
The sale diluted the five venture capital managers' share ownership by a range of 0.17 to 1.03 percentage point, reducing their combined stockholding to 66.14%, according to the prospectus.
Hearst Corp., which owned 5.73% of Pandora before the IPO, sold half its shares in the IPO, leaving it with 2.73% ownership of the company after the sale, the prospectus said.
Pandora in all sold 9% of its stock in the public market, excluding any overallotment in the offering, Mr. Therian said. Of the sale, 6 million shares were sold by the company and 8.7 million shares by existing shareholders, according to the prospectus. The company could sell 2.2 million shares more over the next month in the overallotment, according to a Pandora statement.
The IPO gave the company a market value of more than $3 billion, Mr. Therian said.