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PayPal Goes Public

Posted by ryuzaki0 on from the hip-hip-hurrah dept.

fluffhead234 writes: "Looks like IPO's for internet companies can still bring in something. PayPal, the online payment people, raised just over 70 million in their IPO: PPay Pal IPO"

4 of 166 comments (clear)

  1. paypal by nomadic · · Score: 5, Informative

    Looks like IPO's for internet companies can still bring in something.

    IPOs always bring in something; an IPO just means that the institutions that are underwriting it buy a set amount of stock, then offer it for sale on the market. The company itself risks nothing, as the stock was bought for an agreed-upon price beforehand.

    If the stock tanks, they still get 70 million.

  2. Financial analyst view by mgkimsal2 · · Score: 5, Informative

    There's a an article over at http://www.ipofinancial.com/pow/archive.php?oid=10 4 which has a bit more info, from a financial analyst's viewpoint, but in plain english.

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  3. Warning signs... by PoiBoy · · Score: 5, Informative
    Note that although they only sold 5.4 million shares in the IPO, there are 59.8 million shares outstanding. Hence, there is a large overhang of stock which may be sold after the lockup expires.

    In fact, there is a growing literature which suggests companies purposely limit the number of shares issued in the IPO. This low supply of shares causes the stock to rise in the ensuing days and months as additional investors purchase the stock and analysts begin issuing recommendations. After the lockup, insiders then begin to sell shares in earnest at these high prices which are at least in part due to the manipulative effects of a small number of shares offerred at the IPO. In short, while there may be short-term gains to be made in the stock, be cautious after the lock-up expires.

    Also note that in the past two years the company has managed to lose 1/4 of a billion bucks and is not sure when it will be profitable. That's not exactly the kind of words that bring confidence in this market environment.

    Although the market for IPO's was much smaller in 2001 than in years past, those companies that did come public tended to be more profitable and had better business models and a proven record of success; and they performed relatively well. I don't think PYPL fits this mold, however, so LOOK OUT BELOW! (after a short run upwards).

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  4. Re:Who needs an IPO? by SilentChris · · Score: 5, Informative
    I never understood the logic about this. Yes, you can leave your money in a PayPal account to earn a (tiny) amount of interest. But why would anyone do that if they're not a bank and not FDIC-insured. I generally withdraw my money out of my account as soon as I make it on an eBay auction, and for that purpose PayPal serves me just fine.

    I think anyone who's using PayPal as a bank account is either a) lazy or b) just plain stupid. Like the people who invest in "great opportunities" only to be burned -- you've got to do your research.