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PayPal Seeks $63 Million in IPO

In a play reminiscent of the heady days of the late 1990s, PayPal Inc., which bills itself as "the way to send and receive money online," is planning to offer 5.4 million shares of stock at $12 to $14 each in its upcoming Initial Public Offering.

The Palo Alto, Calif.-based company, which enables any business or consumer with an e-mail address to send and receive secure online payments, said in amended registration statement filed with the Securities and Exchange Commission that it expects net proceeds from the IPO of about $63.3 million.

The company, whose symbol will be PYPL, also said it has granted the underwriters an option to purchase up to 810,000 additional shares of common stock to cover over-allotments. Underwriters are Salomon Smith Barney, Bear Stearns & Co., William Blair & Co. and SunTrust Robinson Humphrey.

Up to $15 million would be used for collateral requirements, and another $10 million to $15 million would be used for capital expenditures, PayPal said in the filing. The rest of the proceeds will be used for general corporate purposes.

In some ways this offering would seem to be a throwback to the heady IPO days of the late 1990s. The company says in its prospectus that it has never made any money.

In fact, for the nine months ending Sept. 30, the company (established in 1999) posted a loss of $89.3 million on revenues of $64.4 million. However, its revenue growth has been incredibly rapid -- it reported income of $5.6 million for the first nine months of 2000.

PayPal, which says it "builds on the existing financial infrastructure of bank accounts and credit cards, said in the filing that for the nine months ended September 30, "our total accounts grew by an average of 18,500 per day."