The music may be over for Pandora's CEO

We tried Apple's AirPods
We tried Apple's AirPods

The music may have stopped for Pandora CEO and co-founder Tim Westergren.

The tech news site Recode reported late Sunday that Westergren will step down as chief executive of the online radio company. Pandora had no comment. Westergren helped start the company in 2000 and was also CEO from May 2002 through July 2004.

Shares of Pandora rose as much as 5% Monday before pulling back a bit.

The report of Westergren's departure comes less than three weeks after the satellite radio company Sirius XM announced it would invest $480 million in Pandora (P). That will give Sirius XM, famous for being the home of Howard Stern, a 16% stake in Pandora.

But Pandora shares are still down more than 35% this year. They even hit an all-time low a few days after the Sirius XM deal.

Investors are disappointed that Sirius XM (SIRI), which is backed by media mogul John Malone of Liberty Media (LSXMA), is only buying a stake in Pandora. There had been rumors that Sirius XM might buy the entire company.

There has also been chatter that Verizon (VZ, Tech30) would be interested in buying a stake in Pandora.

Many investors believe Pandora needs to be part of a larger company to deal with tough competition from Spotify, Apple (AAPL, Tech30), Amazon (AMZN, Tech30) and Tidal, the service backed by Jay-Z.

Despite decent sales growth, Pandora has continued to lose money and may need more cash. To that end, Pandora also said on the day of the Sirius XM investment that it would sell its Ticketfly unit to Eventbrite for $200 million.

And the streaming music showdown is expected to heat up further now that Spotify is rumored to be looking at going public on the New York Stock Exchange.

Taylor Swift also announced recently that she was settling her differences with streaming services, which should help both Pandora and its competitors.

Related: Taylor Swift to Spotify: You belong with me

Swift famously pulled her catalog from Spotify in 2014 after the release of her "1989" album. But her songs are now back on Spotify, as well as Pandora, Amazon and Tidal.

But Sirius XM and Pandora both touted this month's investment as one that would strengthen their companies.

Liberty Media CEO Greg Maffei, who is also chairman of Sirius XM, touted the opportunity to increase ad revenue, saying Liberty has "long recognized the strength of the Pandora brand and the opportunities in the ad-supported digital radio market.

Pandora was a pioneer in free online streaming, but it, too, has begun to experiment with a premium model that lets users avoid commercials. Pandora announced a $10-a-month on-demand service for listeners earlier this year.

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