Pandora Media shareholders balked at the news founder Tim Westergren would become CEO of the streaming media company, which has been a target of takeover speculation.
Shares (P) closed down 12% to $9.60.
Neither departing CEO Brian McAndrews nor Pandora offered a reason for the switch in CEO. Westergren takes over the company he helped create in the 2000s, specializing in radio stations themed after musicians or music genres.
"We are pursuing a once-in-a-generation opportunity to create a massive, vibrant music marketplace," said Westergren in a statement. "We have the audience, the technology infrastructure, the monetization engine and most importantly the right team with the passion and commitment to do it."
The change in CEO is part of a larger management restructuring at the company. President and Chief Financial Officer Mike Herring will focus on monetizing Pandora's core business. Chief Operating Officer Sara Clemens is on "new ventures," while Chief Product Officer Chris Phillips will handle product and marketing.
McAndrews joined Pandora as CEO in September 2013, as the company navigated an increasingly competitive streaming music market. During his tenure, Pandora shares peaked at $37.42 in February 2014. Since then, shares have slumped more than 70%.
Last quarter, Pandora posted a net loss of $169.9 million, far wider than the $30 million loss reported the year before. Trading was halted briefly last month after the New York Times reported the company might be for sale.
The sell-off might reflect a lack of confidence in the changes, said Wedbush analyst Michael Pachter in a note on Monday. Wedbush maintained a buy rating on the company.
"Pandora's three-tier offering (commercial supported and commercial free Internet radio plus on-demand listening) provides it a competitive advantage over virtually every other service," said Pachter. "We expect investors to embrace this strategy once it begins to show signs of success, which we think could take a year or more."
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