NEW YORK—PayPal Inc., a Palo Alto, Calif. start-up company providing mobile and electronic commerce payment services, saw shares of its initial public offering, priced at $13 late Thursday, rise to $18.90 by late morning of its first day of Nasdaq trading February 15.
The deal drew much advance attention from Wall Street, which has been looking for signs that New Economy stocks might still have legs in the aftermath of the burst dot-com bubble.
Salomon Smith Barney led the underwriting syndicate for the IPO, which priced at the middle of its anticipated range of $12 to $14 and constituted the expected 5.4 million shares.
A patent infringement lawsuit, which privately held CertCo Inc. filed against PayPal February 4 in a federal court in Delaware, forced the California company to delay its IPO, originally scheduled for February 6. PayPal had to disclose the legal challenge in a revised offering statement filed with the Securities and Exchange Commission.
In that re-filed IPO registration document, PayPal also noted it had issued a press release February 5 citing Gartner Inc. research that PayPal is the most trusted Internet payment service, according to a survey.
PayPal plans to use net proceeds of the $70.2 million initial public offering for capital expenditures, international expansion and support of its processing transactions.
Venture capital investors in the company include Clearstone Venture Partners, Madison Dearborn Partners, Nokia Ventures L.P. and Sequoia Capital.
