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Pandora Media Inc's historical post-earnings price action doesn't bode well for bulls
Pandora Media Inc (NYSE:P) calls were once again the options of choice on Tuesday. By the numbers, around 12,000 calls were exchanged, compared to roughly 10,000 puts. Diving deeper, it appears a number of speculators were either betting on -- or hedging against -- a short-term bounce in the shares.
Specifically, the equity's November 22 call saw the most action yesterday, with 2,374 contracts on the tape by the close. A healthy portion of these crossed at ask price, and almost all the volume translated into open interest overnight -- two signs of buy-to-open activity.
On the charts, P fell to a fresh 52-week low of $19.91 right out of the gate, but last seen 0.7% higher at $20.90. Longer term, the shares are staring at a more than 21% year-to-date deficit. With nearly 12% of P's float sold short, a portion of yesterday's call buying at the out-of-the-money strike may have been at the hands of short sellers hedging against any unexpected upside.
Looking ahead, Pandora Media Inc (NYSE:P) is scheduled to report quarterly earnings after the close next Thursday, Oct. 23. The stock's technical troubles could be poised to deepen after the company steps into the earnings confessional. Over the past eight quarters, in fact, P has averaged a single-session post-earnings loss of 7%, which includes five double-digit percentage declines. For the streaming giant's third quarter, Wall Street has forecast a per-share profit of 8 cents -- a 2-cent improvement over what Pandora earned one year ago.