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The internet radio firm is believed to have benefited from pent up demand from investors for technology stock, carrying out its initial public offering soon after LinkedIn.
Anupam Palit, senior equity analyst at GreenCrest Capital, told the San Francisco Chronicle that the firm should be valued at about $7.50, with the stocks closing the day at $17.42.
He added: "There's so much demand and so little supply. It's a very frothy environment right now."
Meanwhile, head of IPOFinancial.com David Menlow told the Los Angeles Times that investors got a "dose of reality" as the day wore on, which is why Pandora shares pulled back.
Mr Menlow pointed out that the company's main balance sheet issue is that they cannot benefit from economies of scale, due to the nature of their business model.
Posted by Clive Arneil
