[thelist] Paypal info

Alan Lloyd alan.lloyd0 at btinternet.com
Tue Feb 12 14:17:00 CST 2002

For those PayPal users...

> SAN FRANCISCO (AP) - PayPal Inc. warned Monday that its popular online
> payment service is about to be shut down in Louisiana by that state's
> banking regulators, casting another cloud over the company's widely
> anticipated initial public offering of stock.
> The imminent shutdown of PayPal's service in Louisiana was disclosed in
> Securities and Exchange Commission documents. They detail the risks the
> Palo Alto-based company faces as it tries to overcome the stock market's
> distaste for unprofitable Internet companies.
> PayPal had hoped to sell 5.4 million shares at $12 to $14 apiece last
> week, but a patent infringement lawsuit filed by CertCo Inc. threatened
> to short circuit the company's online payment service. That prompted
> investment bankers to delay the IPO until this week.
> In a counterclaim filed Monday in Delaware, PayPal sought to invalidate
> CertCo's patent claim and alleged the New York-based company waited
> until the last minute to file its complaint to disrupt PayPal's IPO.
> The delay forced PayPal to disclose several new developments, including
> word that Louisiana regulators sent a Feb. 7 letter ordering the service
> to stop brokering payments between online buyers and sellers until the
> company receives a money transmission license.
> Monday's bad news might pressure PayPal to lower its IPO price or pull
> the offering, said Kyle Huske, an analyst with IPO.com.
> "Obviously, you don't want these kinds of negatives to come out in a
> panicky market like this," Huske said. "It's tough to say what will
> happen now. It's all going to depend on the fortitude of the investors
> that they had already lined up for the IPO."
> With the latest revisions to its outlook, PayPal now hopes to set the
> IPO Thursday, paving the way for the company's shares to begin trading
> Friday on the Nasdaq Stock Exchange.
> At the current target price, PayPal's IPO would raise more than $60
> million. As of Sept. 30, the company had $138.6 million in the bank and
> its losses have been steadily diminishing over the past year.
> In its SEC filing Monday, PayPal said it will comply with the Louisiana
> order forcing it to suspend business in that state when management
> receives the notice. The company also said it may appeal the Louisiana
> order in an administrative hearing.
> PayPal's Louisiana customers accounted for 0.9 percent of the service's
> payment volume during the first nine months of last year, according to
> the SEC documents. The company makes its money by collecting a
> commission based on the dollar amount of most transactions completed on
> its e-mail service.
> Although Louisiana represents a small portion of PayPal's overall
> business, the company's regulatory problems in that state might not be
> isolated, management conceded in Monday's filing.
> Besides Louisiana, New York also has notified PayPal the company is
> running an unlicensed banking business. The New York regulators still
> haven't ordered PayPal to stop doing business there, which accounted for
> 6.4 percent of the payment volume handled by the company during the
> first nine months of last year.
> PayPal said regulators in nine other states and the District of Columbia
> have indicated the company needs a license to run its online payment
> service. Those states are: Arizona, California, Colorado, Idaho,
> Massachusetts, Maryland, Texas, Virginia and Vermont.
> The company said it has already filed, or plans to file, applications in
> those states and the District of Columbia. Based on management's
> analysis, the company also has decided to seek money transfer licenses
> in Connecticut, Minnesota and North Carolina.
> PayPal already is licensed in Oregon and West Virginia.
> If state regulators determine PayPal has been running an illegal banking
> business, the company could face substantial fines dating back to when
> the service began with 24 users in October 1999. The service had
> ballooned to 12.8 million accountholders as of Dec. 31.

Send FREE SMS http://www.holographic-web.co.uk

More information about the thelist mailing list