NEW YORK — Pandora raised the price range of its initial public offering Friday by at least a third and boosted the number of shares to be sold by as many as a million, demonstrating again a seemingly insatiable demand from investors for a stake in a new slate of Internet companies.
The popular online radio service may raise as much as $176.3 million with the new offer.
Proceeds for Pandora Media Inc. could reach about $72 million if the shares were priced at $12. Selling stockholders would get up to $104.2 million.
Pandora raised the price range for the shares to between $10 and $12, up from the initial $7-$9 it was seeking. Pandora and the selling stockholders are also now offering up to 14.7 million shares, up from 13.7 million earlier.
The IPO from Pandora, based in Oakland, Calif., comes amid a sizzling market for the latest generation of Internet companies. These include daily deals site Groupon Inc., which has filed to go public, and professional networking service LinkedIn Corp., which has already completed its IPO.
Shares of LinkedIn, issued at $45 in mid-May, soared above $100 before noon on the day they hit the market and closed at $94.25 on a trading volume of 30 million shares. Shares are now trading above $72.
Pandora got its start in 2000 as a music recommendation service, then known as Savage Beast Technologies. It changed its name in 2005 when it launched an Internet radio service that lets people stream music over the Web. Users can create custom stations based on songs, genres or artists.
Joseph Kennedy, a former salesman for automaker Saturn Corp. and executive for online banker E-Loan, has been Pandora’s CEO since 2005. He owns 4.2 million Pandora shares. Other stockholders include venture capitalists Crosslink Capital, Walden Venture Capital, Greylock Partners and newspaper and magazine publisher Hearst Corp.
Pandora offers a basic, ad-supported service for free. Users can pay for a service with no ads that allows them to skip more songs they don’t like and listen to songs in higher sound quality. Most listeners still use the free service.
The company plans to use the proceeds from the offering to pay accrued dividends on its redeemable convertible preferred shares and for general corporate purposes.
The underwriters are Morgan Stanley, JPMorgan, Citi, William Blair & Co., Stifel Nicolaus Weisel and Wells Fargo Securities.