This can't be good for us that use PayPal to fund accounts online. They also said in another statement that they will soon be closing the entire gaming end of their operation. I'm not looking forward to that day...
MC
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EBay to Buy PayPal for About $1.5 Billion in Stock (Update2)
2002-07-08 09:37 (New York)
EBay to Buy PayPal for About $1.5 Billion in Stock (Update2)
(Adds company comment in the fourth paragraph.)
San Jose, California, July 8 (Bloomberg) -- EBay Inc., the
world's largest Internet auctioneer, agreed to buy online-payment
provider PayPal Inc. for about $1.5 billion to make it easier for
users to send and receive payments on transactions.
EBay will exchange 0.39 a share for each PayPal share, the
company said in a statement. That's an 18 percent premium to
Friday's closing stock price. EBay shares fell as much as
4.4 percent in early trading.
About 60 percent of PayPal's business takes place on EBay,
which plans to phase out the company's gambling operations after
the purchase is completed. It expects about $13 million of costs a
quarter related to the acquisition for stock-based compensation
and the amortization of assets. EBay also said that second-quarter
profit and sales were higher than forecast.
``It is very clear to us that EBay and Paypal can each help
each other expand,'' Peter Thiel, Paypal founder and chief
executive, said on a conference call with analysts and investors.
Other merchants also use PayPal's e-mail system, paying a fee
on each transaction. Individual customers pay no fee to send or
receive payments via their e-mail address after setting up an
account with PayPal. The money is deducted from their credit card
or checking accounts. It will remain as an independent brand.
Mountain View, California-based PayPal said last month that
second-quarter sales would be as much as $54 million and profit
before some costs was expected to be 8 cents to 9 cents a share.
It had first-quarter earnings of about $1.23 million, or
2 cents, on sales of about $48.8 million.
Net Income
Paypal will replace EBay's money-losing EBay Payments by
Billpoint unit, the companies said. EBay said it will phase out
Paypal's gaming business, which was projected to account for as
much as 15 percent of sales, because of the regulatory issues
involved with online gambling.
Shares in San Jose, California-based EBay fell $1.79 to
$58.76 in early trading. They had dropped 9.5 percent this year.
PayPal rose $2.56 to $22.56.
PayPal was the first Internet company to go public in almost
a year when sold 5.4 million shares in February. The stock had
surged 54 percent since the initial public offering.
EBay's net income was about $54.3 million, or 19 cents a
share, on sales of about $266 million. The company had said it
expected profit of 17 cents a share on sales of $260 million to
$265 million. It earned about $24.61 million, or 9 cents, on sales
of $$180.9 million in the year-earlier period.
Both companies will release complete second-quarter results
on June 24. EBay is forecast to earn 17 cents a share, according
to the average estimate of analysts surveyed by Thomson First
Call.
Stay with Netteler accounts.
Planetpinnacle. I have collected three times and no problems. If you withdraw 500+ the transaction is 100% free.
Don't expect all of the books to jump on this bandwagon. And also, look for this to really irritate smaller players that are gonna be stuck paying the fees.
I suspect that Western Union will get a lot more action....
MC