Pandora shares plunged on Friday following a news report that Apple's in negotiations with record labels to start a streaming music service.
NEW YORK (TheStreet) - Just in case we needed another reminder of Apple's(:AAPL) punching power ahead of its anticipated iPhone 5 launch next week - a rumor about the tech giant's entry into the streaming music space hammered shares of Pandora Media(:P) on Friday.
Pandora shares closed down 16.71% at $10.47 after The Wall Street Journal reported that Apple's in negotiations with record labels to start a music streaming service.
At least one analyst, however, described the potential move as underscoring the value of Pandora's platform. "We believe Pandora's success will continue," explained Jordan Rohan, an analyst at Stifel Nicolaus, in a note released on Friday. The Internet music space, he added, is littered with competitors, none as successful as Pandora.
For Rohan, the Apple streaming music chatter is the sincerest form of flattery for Pandora. "Competitors have always been present in streaming music and Internet radio," he explained. "Recently, Pandora shares have suffered through the approach of Spotify, Turntable.fm and iHeart Radio (Clear Channel), only for investors to realize that the usage of Pandora continues to grow. Either way, Apple is acknowledging the success and future potential of Internet radio."
Pandora, which also competes with Sirius XM(:SIRI), recently reported better-than-expected second-quarter results last month, and also offered bullish third-quarter and full-year outlook.
Apple shares closed up 0.63% at $680.5 on Friday.
Both Pandora and Apple declined to provide comment for this story.
TheStreet will be live-blogging Apple's product launch next week, which is widely expected to mark the launch of the iPhone 5:
--Written by James Rogers in New York.
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