Apple Music’s damage to Pandora contributed to Deezer’s decision Tuesday to pull its initial public stock offering.
Didier Bench, chairman of Deezer’s board, told the Wall Street Journal the company changed its mind after seeing Pandora shares fall 36 percent last week. He added Netflix’s disappointing third-quarter also factored into the decision. “It’s better for us to wait a bit,” Bench said.
Signs pointed to problems on Monday. A report at GlobalCapital claimed Deezer’s offering had not yet closed as of Monday afternoon. Its source described a “a bit of a challenging backdrop” after Pandora’s market value took a dive.
Investors had good reason to change their sentiment. Pandora shares plummeted Friday after its third-quarter earnings revealed Apple Music had contributed to a sharp slowdown in growth of listeners and listening hours.
Earlier in the month, Apple revealed Apple Music had quickly accumulated 6.5 million subscribers since three-month free trials ended September 30. It has a total of 15 million accounts for individual and family plans across over 100 markets.
But investors already knew the good and bad of Deezer last month. The company’s prospectus, issued for the IPO, showed a growing music subscription company whose revenues were swallowed almost completely by royalties, and who generated revenues from only 60 percent of its 6.3 million subscribers.