Oakland-based Internet radio company Pandora Media Inc.'s $16 IPO share price has left the market wondering whether the shares are overvalued or not.

Pandora became the latest company, Tuesday, to take advantage of red-hot valuations for Internet companies by pricing its 14.7 million IPO shares at $16 each.

The latest pricing allows Pandora to raise $234.9 million and values the company, which hasn't earned any profits till date, at about $2.6 billion.

According to a regulatory filing, Pandora's shares will begin trading on the New York Stock Exchange on Wednesday under the symbol 'P'.

The lead underwriters for the IPO were Morgan Stanley, JPMorgan and Citi.

The $16 a share price reflects the bullish sentiment of investors for Internet companies. Last week Pandora had increased its price range target to $10-12 a share. In April, it had projected the target range at between $7-9 a share in a filing with the U.S. Securities and Exchange Commission.

Recently social networking site for professionals, LinkedIn, and Renren, the No.1 social networking choice among China's teenagers went public in the US market and received good response from investors by trading far above listed price on their debut. Later this year, a slew of hot tech companies, including Facebook, Twitter, Groupon and Zynga, will be hitting the market.

Pandora, which allows users to customize the songs that are streamed and create their own playlist based on a song, artist or genre, has over 90 million users in the U.S. The company, whose primary revenue is from advertising (Pandora also offers users a music subscription service which streams music at higher audio quality and without ads), reported revenue of $51 million and a net loss of $6.8 million for the 3 months ended April 30, 2011.

Naturally a question arises whether the shares are overpriced.

According to Espen Robak, president of New York City-based Pluris Valuation, Pandora is strongly positioned in the online music sector. Despite stiff competition from San Francisco-based Rdio, San Diego-based Slacker and two London-based firms, Spotify and Last.fm, the company's revenue has continued to soar and its losses dwindle - in fiscal year 2010, Pandora lost $24.9 million and in fiscal year 2011 it lost $11 million.

And though Pandora said it expects to continue losing money through at least fiscal 2012, Robak feels it could be on a solid footing once profits start coming in.

Agrees Anupam Palit, an analyst with New York City-based Greencrest Capital. However, Palit feels the shares have been overpriced.

Pandora, Palit said, is a great, great company, but it might not be worth this kind of hype.

What do you think? Are we entering another age of tech bubble?