Pandora shares melt down on Day 2

Internet radio company's stock plunges more than 20% day after IPO

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I'm actually getting pretty sick of writing about Pandora Media (this is the fifth post in a week), but what happened on Thursday is pretty amazing.

Shares of Pandora (NYSE: P) plummeted more than 20 percent just one day after the Internet radio company's initial public offering -- which itself was only a muted success.

(Also see: Pandora IPO begins with a bang, ends with a whimper)

After pricing Wednesday at $16, Pandora shares climbed as high as $26 a share before closing at 17.42.

Thursday's high was only 16.99, which Pandora hit early in the trading session. After treading water until about 2:30 p.m., the stock began an alarming descent, hitting as low as 13.03 before closing at 13.27, or 23.8 percent below Wednesday's ending price.

In market-cap terms, Pandora in one day went from being worth $2.79 billion to $2.12 billion.

As I wrote on Tuesday, most IPOs in heavily hyped sectors enjoy a big opening day and then experience a slow fizzle. That's what happened with Demand Studios (NYSE: DMD), LinkedIn (NYSE: LNKD) and Yandex (NASDAQ: YNDX).

But Pandora isn't fizzling; it's plunging. And the plunge isn't being driven by any particular news, just a growing (and seemingly sudden) realization among investors that Pandora isn't going to be profitable any time soon and faces serious hurdles on the road to profitability.

You have to wonder if this will chill the IPO plans of Groupon and Zynga, both of which are expected to go public this year.

One thing is for certain: There is no new Internet bubble. At least not yet.

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