Pandora Media Inc (P) Bulls Go Nuts Over 'Serial' Deal

Pandora Media Inc (P) has become the exclusive streaming partner for 'Serial' season two

by Alex Eppstein

Published on Nov 2, 2015 at 2:13 PM
Updated on Jun 24, 2020 at 10:16 AM

Whether or not you think Adnan "did it" -- and he definitely did -- smash-hit podcast "Serial" will be back for a second season. This time around, the program will have an even bigger platform on which to promote itself: Pandora Media Inc (NYSE:P). As of today, the Internet radio company -- which boasts nearly 80 million monthly visitors -- has snagged exclusive rights to broadcast the first season of "Serial," and will also serve as the exclusive streaming partner for season two.

The news has sent P shares 5% higher to trade at $12.08. Option traders have responded to the surge, too, with buy-to-open activity transpiring at the out-of-the-money November 13 call. More than 6,200 contracts have been exchanged, making it the stock's most popular strike by far. By buying to open these calls, traders anticipate P will muscle its way above $13 by the close on Friday, Nov. 20, when front-month options expire.

Taking a step back, the equity's intraday call volume more than doubles put volume. This is business as usual, per P's Schaeffer's put/call open interest ratio (SOIR) of 0.48, which rests below 99% of comparable readings from the past year. In other words, traders have been extremely call-focused, when looking at options with a shelf-life of three months or less.

Not everyone's on P's bullish bandwagon, though. For one, over half of covering analysts rate the shares a "hold" or worse. For another, 13.2% of the stock's float is sold short, representing one week's worth of pent-up buying power, at typical volumes. If Pandora Media Inc (NYSE:P) can make a run at the 13 strike, this skepticism could start to unwind -- potentially leading to tailwinds.

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