Business news in brief

Shares of Pandora near all-time low

OAKLAND, Calif. -- Pandora Media Inc., the largest Internet radio service, is exploring a possible sale, according to a person familiar with the matter. The shares fell close to an all-time low Friday as some analysts lowered their price targets amid mounting losses and competition from Spotify and Apple.

The company is working with Morgan Stanley to reach out to buyers, said the person, who asked not to be identified discussing a private matter. The talks are preliminary and may not lead to a deal, the person said Thursday before the online-radio provider reported fourth-quarter earnings that missed analysts' estimates. Pandora and Morgan Stanley declined to comment on a potential sale.

Pandora shares fell $1.09, or 12 percent, to close Friday at $8. It slumped as low as $7.10 intraday, the lowest since November 2012, as several analysts, including some recommending the stock, reduced their price targets.

The Oakland, Calif.-based company, which has been unprofitable each year since its initial public offering in 2011, is trying to grab advertisers from radio while competing against Spotify and Apple and battling record labels and music publishers over how much it pays to play their songs.

-- Bloomberg News

Etch A Sketch sold by longtime owner

BRYAN, Ohio -- The Ohio company that has produced or owned the Etch A Sketch for more than five decades has sold the classic toy to a Toronto-based toy firm.

Bryan-based Ohio Art Co. made the surprise move to sell the Etch A Sketch and its spinoff, the Doodle Sketch, to Spin Master Corp. for an undisclosed price. Ohio Art announced the sale Thursday.

"I think it's such an icon, it's a part of our everyday life here," Martin Killgallon, Ohio Art's president, told The Blade in Toledo. "It'll be bittersweet, but we had to look at the long-term future of the business."

The company said the move leaves it with more capital to focus on metal lithography, the craft on which it was founded more than a century ago.

"Ohio Art is squarely focused on continuing to build its reputation as one of the premier metal lithographers in North America," Chief Executive Officer Elena West said.

The Etch A Sketch was created by a French inventor in 1955. The brand has been produced or owned by Ohio Art since 1960, when it bought the rights for $25,000 after executives saw it at a toy fair in Nuremberg, Germany, in 1959.

Production of Etch A Sketch and its spinoff was moved to China more than 15 years ago.

-- The Associated Press

Billionaires take 2 seats on AIG board

NEW YORK -- John Paulson and Carl Icahn, who became billionaires by identifying mispriced securities and pushing for corporate shakeups, face a new challenge after winning seats on the board of insurer American International Group Inc.

Paulson was nominated to be a director along with Samuel Merksamer of Icahn Capital, AIG said Thursday after markets closed. The New York-based company simultaneously announced a fourth-quarter loss of more than $1.8 billion, driven by higher-than-expected claims costs at the property-casualty operation, the business that Icahn and Paulson's firm have said should be the core of a scaled-back AIG.

"Their job is to keep the pressure on," Robert Haines, an analyst at CreditSights, said in an email. "They have an uphill battle, but every time AIG stumbles, their argument gets stronger."

The additions to the board mark a reversal for AIG after Chief Executive Officer Peter Hancock rebuffed Icahn's demands to break the firm into three companies -- one offering P&C coverage, another providing life insurance and a third backing mortgages. Hancock said a split could hurt the company's credit rating and jeopardize tax assets. The CEO also had dismissed Icahn's insistence that there could be substantial benefits in avoiding the regulation that comes with AIG's designation as a systemically important financial institution.

Now, Hancock "has to listen to them," Haines said.

-- Bloomberg News

French court OKs suit against Facebook

PARIS -- Facebook lost a crucial legal battle Friday as a Paris court ruled the social network can be sued in France over its decision to remove the account of a French user who posted a photo of a famous 19th-century nude painting.

The ruling by the Paris appeals court could set a legal precedent in France, where Facebook has more than 30 million regular users. It can be appealed to France's highest court.

It means a French court will now be entitled to hear the case of Frederic Durand-Baissas, a 57-year-old Parisian teacher and art lover whose Facebook account was suspended five years ago without prior notice. That was the day he posted a photo of Gustave Courbet's 1866 The Origin of the World, which depicts female genitalia.

He wants his account reactivated and is asking for monetary damages.

Facebook, which has not given an explanation for the suspended account, could not immediately be reached for comment after the ruling.

Its current "Community Standards" page says: "We restrict the display of nudity because some audiences within our global community may be sensitive to this type of content -- particularly because of their cultural background or age."

-- The Associated Press

Inventories rise, sales fall in December

WASHINGTON -- U.S. businesses increased their stockpiles slightly in December, as sales dropped sharply. This combination has stoked anxieties about weakening economic growth, as sales over the entire year dropped for the first time since the last recession.

The Commerce Department said Friday that December business inventories rose a seasonally adjusted 0.1 percent, after having slipped 0.1 percent in November. Both manufacturers and retailers -- which were responding to Christmas shopping -- increased their stockpiles.

The figures suggest that businesses are struggling to sell off their inventories, a potential sign of lower demand and excess supply that signals slowing growth. Still, strong hiring levels have warded off fears of a downturn.

The inventory-to-sales ratio has risen to 1.39 from 1.33 a year ago, evidence that products are lingering on store and warehouse shelves. December recorded the highest inventory-to-sales ratio since May 2009.

-- The Associated Press

Business on 02/13/2016

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