NEW YORK (CNNMoney) -- Internet radio site Pandora priced its initial public offering at $16 a share late Tuesday -- almost twice what it initially expected to fetch.
Pandora, which has never turned a profit, filed to go public in February. At the time, the company expected to raise $100 million. On June 2, Pandora set a target price range of $7 to $9 per share -- then upped it to $10 to $12 per share last week.
The steady increases were a sign that the IPO's underwriters -- including Citigroup (C, Fortune 500), Morgan Stanley (MS, Fortune 500) and JP Morgan Chase (JPM, Fortune 500) -- anticipated high demand.
At $16 per share, Pandora's offering gives the company a market capitalization of $2.6 billion.
Pandora will begin trading Wednesday on the New York Stock Exchange under the ticker symbol "P." Founded in 2000 as the Music Genome Project, the site uses algorithms and user feedback to generate music recommendations for its listeners.
Unprofitable: As with other tech IPOs this year, investors seem to be shrugging off Pandora's history of red ink. In its updated filing Tuesday, Pandora said it lost $6.8 million on revenue of $51 million in its first fiscal quarter, which ended April 30.
Pandora has never turned a profit, and the company said it expects to continue losing money "through at least fiscal 2012."
Its audience numbers are strong, however. As of April, Pandora had 90 million registered members, up from 80 million in February. Those members racked up 3.8 billion hours of listening to Pandora's song stream at the end of the 2011 fiscal year.
But as as its audience grows, so does its biggest cost: the royalties it pays for the music it streams. Pandora's filing said its current rates for royalty payments are good until 2015, after which it will need to renegotiate.
"There is no guarantee that the [new] rates ... will allow us to reach sustained profitability," the filing added.
The company does make some money off one of two options it offers listeners: A free, ad-supported stream or a "premium" plan priced at $36 per year, which offers higher audio quality and no ads.
Lack of profitability hasn't cooled 2011's hot tech IPO market so far.
LinkedIn (LNKD), which went public last month, revealed that it turned slight profits in 2010 and 2006 -- but otherwise has been in the red every year since its 2003 inception. Still, LinkedIn shares more than doubled in its debut, giving the site an initial $9 billion valuation.
Groupon's river of red ink is even deeper. The daily deals site filed for its IPO earlier this month, revealing that it lost $413 million in 2010 and lost almost $114 million in the first quarter of 2011.
Shares of Fusion-io (FIO), which makes storage systems for data-heavy tech companies like Facebook, surged 18% in their public debut last week. The company lost almost $32 million in its last fiscal year. 
