Pandora, the internet radio company, became the latest web company to go public Wednesday in what has become a full-blown IPO gold-rush.

After pricing its shares at $16, Pandora (P) saw its stock open at $20 and then immediately soar to $26, an increase of over 60 percent. In mid-day trading, the company’s shares had fallen below $20, with major market indices down over one percent as protests over Greece’s austerity plan turned violent.

Like several of its web IPO brethren, Pandora currently loses money. But that didn’t stop the company from raising $235 million at the $16 offering price, well higher than expected range of $10-$12 per share. At the offering price, Pandora was valued at $2.6 billion.

Morgan Stanley, J.P. Morgan Chase and Citigroup were the lead underwriters.

Pandora, which boasted 90 million listeners at the end of April, lost $1.8 million on revenue of $138 million last year, and said in documents filed with the Securities and Exchange Commission that it expects to incur operating losses through at least fiscal year 2012. (Pandora S-1 filing)

Pandora, which lets users create their own web “radio stations” and then makes recommendations based on users’ tastes, is a free service. The company generates most of its revenue from advertising on its website; subscription revenues account for under 10 percent of sales.

Pandora is just the latest internet company to enjoy a strong first day performance as a public company. Earlier this year, ZipCar raised $174 million and watched its stock price close up 60 percent in its first day. Demand Media, which went public in January, enjoyed a 33 percent first-day pop.

Pandora only offered about nine percent of its shares outstanding to the public, a relatively low percentage which, coupled with strong investor demand for hot internet issues, may have contributed to the company’s opening pop.

The internet IPO boom of 2011 shows no signs of abating. Web discount service Groupon recently priced a $750 million IPO and social gaming firm Zynga is expected to announce an offering soon. Social networking titan Facebook, meanwhile, is reportedly considering an IPO in the first quarter of next year at a whopping $100 billion valuation.

Image: Pandora S-1 filing