An activist with a 10 percent stake in Pandora is pressuring the company to sell itself (P)

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Shares of Pandora are up almost four percent in after-hours trading, after an activist investor launched a campaign to force the company to put itself up for sale.

In a letter addressed to Pandora's board of directors filed on Monday, Corvex Management's Keith Meister claims that his firm owns 9.9% of the company's stock, and expresses concerns "the company has been unable to date to translate its great product into a great business with an attractive public market valuation."

With Pandora's share price sagging, with big spending on acquisitions like TicketFly, and without a clear plan to growing the core internet radio business, Pandora "may be pursuing a costly and uncertain business plan," writes Meister.

He urges Pandora to hire an outside bank to explore a "value maximization process" that could include a sale.

Here's the important part: 

We have become increasingly concerned that the company may be pursuing a costly and uncertain business plan, without a thorough evaluation of all shareholder value-maximizing alternatives.  For the reasons set forth below, we urge the company to immediately engage an independent investment bank with a fresh perspective and without any prior history of advising the company to advise on a value maximization process – including the execution of a sales process – and to evaluate the results against other options including the risk-adjusted value of continuing to operate on a standalone basis.

It's been a tough stretch for Pandora: It hasn't been profitable since its 2011 debut on the public markets. And when Pandora cofounder Tim Westergren came on as CEO in a turnaround play, the stock tanked. All the while, competitors like Spotify, Apple Music, and Google Play are getting more competitive by the day.

A Pandora spokesperson shared the following response:

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