Will Ticketfly Buy Spark Pandora Media Inc's (P) Next Move Higher?

Pandora Media Inc (P) reached a $450 million deal to buy Ticketfly

Oct 7, 2015 at 9:13 AM

Pandora Media Inc (NYSE:P) has agreed to purchase small-venue ticketing agency Ticketfly for $450 million in cash and stock. While shares of the Internet radio firm are failing to benefit from the M&A buzz pre-market, option traders have been banking on upside for some time.

At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), P has racked up a call/put volume ratio of 5.33 over the past 10 weeks -- with more than five calls bought to open for each put. More significantly, this ratio outranks all but 2% of comparable readings from the past year, indicating a much stronger-than-usual appetite for bullish bets over bearish.

Optimism toward P isn't constrained to its options pits, either. Two-thirds of covering analysts have doled out "buy" or better assessments.

There's a reason for that. Pandora Media Inc (NYSE:P) has soared over 23% year-to-date to trade at $21.98 -- a 2015 closing high -- and since early September has been ushered higher by its 10- and 20-day moving averages. On a relative-strength basis, the shares have outperformed the broader S&P 500 Index (SPX) by 50.8 percentage points over the previous 60 sessions.

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