Pandora IPO prices at $16 per share; seeks $176.2 million in expanded share sale after 10-year loss

NEW YORK (CNNMoney) -- Internet radio site Pandora priced its initial public offering at $16 a share late Tuesday -- almost twice what it initially expected to fetch.

Pandora, which has never turned a profit, filed to go public in February. At the time, the company expected to raise $100 million. On June 2, Pandora set a target price range of $7 to $9 per share -- then upped it to $10 to $12 per share last week.

At $16 per share, Pandora's offering gives the company a market capitalization of $2.6 billion.

Pandora will begin trading Wednesday on the New York Stock Exchange under the ticker symbol "P." Founded in 2000 as the Music Genome Project, the site uses algorithms and user feedback to generate music recommendations for its listeners.

In its updated filing Tuesday, Pandora said it lost $6.8 million on revenue of $51 million in its first fiscal quarter, which ended April 30.
Pandora has never turned a profit, and the company said it expects to continue losing money "through at least fiscal 2012."
Its audience numbers are strong, however. As of April, Pandora had 90 million registered members, up from 80 million in February. Those members racked up 3.8 billion hours of listening to Pandora's song stream at the end of the 2011 fiscal year.

But as as its audience grows, so does its biggest cost: the royalties it pays for the music it streams. Pandora's filing said its current rates for royalty payments are good until 2015, after which it will need to renegotiate.

The company does make some money off one of two options it offers listeners: A free, ad-supported stream or a "premium" plan priced at $36 per year, which offers higher audio quality and no ads.