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To: Puck who wrote (2007)	2/15/2002 3:39:30 PM
From: Eric L	Read Replies (1) \| Respond to of 9255

re: Paypal IPO Currently at $19.985 << Paypal, one of Nokia's venture capital investments >> >> Paypal Delivers Investors IPO Payday Steve Gelsi CBS.MarketWatch.com IPO REPORT Feb. 15, 2002 PayPal shares picked up steam by boosting gains to nearly 70 percent in afternoon action on Friday as the delayed IPO got a welcome reception from investors. The $70 million offering opened at $15.41 a share, well above its $13 price, and drove up to $21.65 on brisk volume of 7 million shares. PayPal (PYPL) priced its 5.4 million-share initial public offering in middle of the expected range of $12 to $14. Legal wrangling delayed IPO The online payment specialist, used widely by EBay (EBAY) customers for online purchases between individuals, planned to launch its IPO last week, but postponed the offering after CertCo, a New York-based competitor, filed a patent infringement lawsuit. PayPal countered by saying in filings that CertCo's patent was invalid and that its lawsuit intended to disrupt its IPO. In filings earlier this week, PayPal revealed that regulators in several states are questioning whether its online payment business amounts to an unauthorized banking operation. Louisiana ordered PayPal to stop operating there until it obtains a license to transmit money. Despite the bump in the road to its IPO, PayPal managed to move ahead as one of the first Internet-flavored deals in recent memory. David Menlow of IPOfinancial.com hailed PayPal's quick revenue growth. "This is not the story of another Western Union, this is a piece of marketing brilliance that couples the simplicity of e-mail and the world's existing financial infrastructure that has been a silent integral part of our lives for many decades," Menlow said in his Pick of the Week Column. The company began 2000 with 12,000 users. After six months, that number had increased to 2.2 million accounts. The 10 million accounts threshold was crossed long before the quarter ending Sept. 30. Now it has about 13 million and counting. Customers sign up with a credit card, or by sending in a check. They can then conduct transactions over the Web using PayPal as a financial service provider. PayPal rang up $30 million in revenue and a net loss of $32.3 million in the quarter ending Sept. 30, compared with revenue of $2.3 million and a loss of $60 million in the year-ago period. The company listed $22 million in cash and $266 million in total assets as of Sept. 30. From The Heart Of Silicon Valley The Palo Alto, Calif. company was launched by high-tech financier Peter Thiel and twenty-something-year-old whiz kid Max Levchin. Thiel, a founder of Cofinity and a venture capitalist/lawyer is PayPal's chief executive officer. His 11 million shares have a paper value of $143 million at the IPO price, but are currently worth more than $200 million. Levchin was CEO of NetMeridian Software and co-founder of SponserNet, an online advertising service. He's chief technology officer of PayPal. Levchin's 5.2 million shares are worth $68 million at the company's $13 offering price, and more than $100 million as the stock gains in the open market. To be sure, insiders have lockup periods that usually keep them from selling their stock until six months after the IPO. Other shareholders in the deal include marquee venture capital firm Sequoia Capital and Nokia (NOK), the wireless equipment giant. Clearstone Venture Partners and Madison Dearborn also own stakes. IPO watchers categorize PayPal as the first dot-com IPO since LoudCloud (LDCLlast year, although most companies going public nowadays have the Internet integrated into their business. LoudCloud made its debut at $6 per share in the midst of the Nasdaq meltdown of 2001 and is now trading at about $3.50. GameStop (GME), for example, has an active Web site where it sells video games online, but it's not considered an Internet IPO since it mostly operates traditional retail stores. << - Eric -