posted on September 29, 2001 07:56:54 PM
..and they expect to lose more next year. I think I'll do ATM withdrawals a little more often to be on the safe side.
posted on September 29, 2001 10:59:51 PM
Are they offering any kind of reward? I'd be happy to help them find it, but I would like to be compenstated for my time. I'll bet that d*mn Mr. Potter had something to do with this...I'm gonna try to find George before he goes jumping off anymore bridges.
posted on September 29, 2001 11:22:41 PM
PayPal is planning on going public. They filed a registration statement of their intention with the SEC on Friday. This is the press release:
posted on September 29, 2001 11:36:50 PM
In four rounds of financing, Paypal has raised $225 in venture capital. They've lost $231 million (through June, probably at least another $20 million since then.)
At now we understand why their User Agreement now talks about what happens to users' money if they declare bankruptcy (not that the UA means anything if that happens).
posted on September 29, 2001 11:44:00 PM
I was talking to my ex wife today and she told me that it was in the local paper that ebay and Yahoo were filing for bankruptcy. I told her that I thought she was mistaken, and that ebay just made profits according to the Nightly Business Report on PBS. Perhaps this is what she was talking about.
Professorhiggins,
I love that movie. At least George Bailey only lost $8,000.00. Actually Uncle Billy lost it in the newspaper when he handed it back to Mr. Potter.
posted on September 30, 2001 03:49:13 AM
This is a final act of desperation. The numbers show that they've lost approximately $231M since inception. They've received approximately $225M in funding from VC's during that time.
No doubt the VC's cut the supply off. Two choices: (1) Fold up shop, or (2) try an IPO to get enough money to continue operating.
They must be counting on their own users to buy up these shares (no investor will), but with the pattern of lies & deception (remember the "we'll be free forever, we make our money on the float"?), it only has a remote chance of generating the $80.5M they hope for (and even if it does, it only prolongs the inevitable for another few quarters).
It would be funny to see eBay announce that they're making Billpoint free to all users a day before the PayPal IPO. LOL. They're too greedy to do it, but it sure would be funny.
IMHO, this will have mixed effects for eBay. They'll finally be able to get Billpoint to somewhere near profitable. Unfortunately, they'll be hitting the users once again when they're down... This will NOT be a good time for a fee increase... Sales will be sagging. People will be struggling. eBay will seem quite "opportunistic" raising fees so soon after PayPal folded... What else is new.
posted on September 30, 2001 08:34:07 AM
The paypal IPO is likely to be used to obtain funds to help pay off debt. However, companies usually use their IPO to obtain money for growth purposes. Without seeing the documents filed, I cannot be sure. Not too long ago, Kraft (the company that makes all the Kraft Foods i.e. Mac and Cheese), had an IPO. The reason behind this was partly to raise funds. Kraft might be trying to raise funds for future purchases of other companies, or some other reason. It doesn't really matter.
One of the possible reasons they might do an IPO is to make the current shareholders in this privately owned company able to sell their shares, and to give the (private) shares a more concrete value. Take a financial accounting course if you need more info.
"In pioneer days they used oxenfor heavy pulling, and when one ox couldn't budge a log, they didn't try to grow a larger ox. We shouldn't be trying for bigger computers, but for more systems of computers." - Grace Hopper
posted on September 30, 2001 09:41:13 AM
Dow Jones news service is reporting that the filing states about $10 million to $15 million of the proceeds will be used to support growth of transaction processing with outside vendors and about $10 million to $15 million will be used for capital expenditures.
The filing also indicates the rest of the funds will be used for "other general corporate purposes."
If anyone here subscribes to edgar-online, you can read the complete filing.
posted on September 30, 2001 10:22:07 AM
Stop worrying...
this time next year, you will all be back at your real life jobs (or the unemployment line) talking about how great ebay once was.
There will be no ebay, or paypal, or AW, or OAUA, or any other damn auction related site of value.
The time has come to face reality friends.
I am not a "sky is falling" kinda person, but I predicted how long the ride would last back when it started, and I have been right on target all the while.
That's why I quit ebay a few months back to get my B&M in high gear, BEFORE the crash.
Time is going to start moving backwards in many ways, not just auctions.
I wish you all the best, but it isw NOT going to get better in the auction game.
posted on September 30, 2001 10:44:30 AM
glasshappy According to Paypal:
"PayPal will at all times hold your funds separate from its corporate funds, will not use your funds for operating expenses, and will not voluntarily make funds available to its creditors in the event of bankruptcy or for any other purpose. You are not required to keep funds in the PayPal system (i.e., carry a balance in your PayPal account) in order to use the Service. If you do carry a balance in your PayPal account and do not enroll in the Money Market Reserve Fund, PayPal will pool your funds together with funds from other Users, and will place those funds in an account at an FDIC-insured bank, or in highly-rated liquid debt securities with a maturity of not more than one year. You agree that any earnings on those deposits or investments will be the property of PayPal, and you will not receive interest or other earnings on the funds that PayPal handles as your agent. "
Sounds good but notice the word "voluntarily"
in the first line - I think that could be interpreted as "tied up for years" in a legal wrangle.
Thanks for the info - just emptied my balance. That's not good if financial wizard types are losing that kind of money. Must be paying out a lot at the top level salaries.
"Put all your eggs in one Basket-
Then watch the Basket!".......Mark Twain
posted on September 30, 2001 11:02:22 AM
Go to Free Edgar
http://www.freeedgar.com/
Search filings (left column), enter "Paypal" in the company space
Then click view filings for Pay Pal Inc
Then click S-1
Then "body" over in the left column to see the meat of it
It's very fatty meat, much like balogna. All the risk factors seem to be laid out, including that eBay might trash them.
A direct quote:
"During the four months between July and October 2000, we experienced a significant fraud episode and, as a result, we incurred gross losses due to unauthorized charge-backs totaling $5.7 million."
posted on September 30, 2001 02:20:25 PM
An excellent job of distorting the facts, quickdraw29.
The $231M figure represents all losses since the company started -- not current losses, and also includes the purchase of their X.com competitor. For the last quarter, PayPal had:
$20M in revenues
less $10M for transaction fees
less $2.5M set aside for transaction losses (i.e. fraud)
less $1.5M for marketing
less $7.5M for general and administrative
less $7.5M for customer service and operations
less $16.5M for amortization of goodwill and other intangibles (i.e. straight-line depreciation over a 2-year period of purchase of X.com company on March 30th 2000 including all technology, employees, and customers. This very large expense will obviously go away in March of 2002 unless other companies are purchased.)
for total operating expenses of $48.5M yielding a net loss for the quarter of only $27.5M, not the $231M figure claimed above.
It should also be noted that PayPal currently has $250M in assets, $135M of which is cash and cash equivalents, and only $108 of that $250M is "due to customers" i.e. customer's money. The other $142M (more or less) is PayPal's money.
Stated another way, the sum total of all money PayPal owes it customers right now is only $108M, and PayPal has $135M in cash on hand to pay that. In addition to this $135M in cash, PayPal has another $142M in assets. So your money is definitely not in any immediate danger. Another unpopular truth is that if PayPal's customers didn't keep their accounts bone dry all the time (out of fear), their transaction fees would be significantly less than they are now.
I suggest that rather than folks crying about "the sky is falling", that they actually *read* the SEC filing for themselves. Go to hereand then click on "S-1 HTML" on the left hand side. [This is a much more direct link than given by the previous poster.]
[ edited by StormThinker on Sep 30, 2001 02:31 PM ]
posted on September 30, 2001 02:44:28 PM
"this time next year, you will all be back at your real life jobs (or the unemployment line) talking about how great ebay once was."
Been hearing the same crap since Ebay started. Ebay is here to stay. It will change, and grow, but it certainly will not disappear.
[ edited by celebrityskin on Sep 30, 2001 11:05 PM ]
posted on September 30, 2001 04:33:29 PM
I believe that our accounts with Paypal are FDIC insured, and guarantee up to 100.000. I don't think anybody has that much money in Paypal account, so we should not worry at all.
posted on September 30, 2001 04:53:00 PM
ploverlane,
I do not think the average PayPal account is FDIC insured. PayPal is not a bank so is not covered by FDIC insurance.
posted on September 30, 2001 05:03:17 PM
Paypal.com is NOT FDIC insured. It is NOT a bank or subject to banking regulations.
Paypal.com has Traveler's Insurance of $100,000 on your account for:
"Protection against unauthorized withdrawals from your account at PayPal, including unauthorized withdrawals from any checking account you may have linked to PayPal, up to $100,000. "
"Insurance that is instant and FREE - you don't have to apply for coverage and there is no cost to you. "
That is direct from their website. Your money is NOT insured if they go bankrupt. You have NO protection, period. None.
It is obvious. The VC capital has run dry, and paypal desperately needs funding to continue operations for a couple of more years. They spent a measely $48,000 on marketing, instead choosing to ride on the backs of sellers on ebay to make it 10 million customers "strong".
One thing paypal.com should tell us, is if they have not made a profit yet, how are the planning to do so? Raise the transaction rates? Hope for more members?
Perhaps the top brass just need a few million more from the IPO so they can take the company into bankruptcy and live like Kings while the customers are out in the cold? Like so many other tech companies.
posted on September 30, 2001 05:11:07 PM
If Ponoco thinks that now that the concept of online trading of goods directly between individuals has been well well established it will just disappear overnight and nobody will jump into the service vacuum if any current players fail he is dreaming.
You may as well expect Walmart or K-Mart to fold up and nobody would move into the void with a similar set of services for that market.
It would take such a collapse of the economy that utilities are failing and we no longer have reliable electric power or ISP's before that would happen.
posted on September 30, 2001 07:05:57 PMThey spent a measely $48,000 on marketing, instead choosing to ride on the backs of sellers on ebay to make it 10 million customers "strong".
Hmmmm... "spending money" on traditional advertising is not necessarily the most cost-effective way to gain customers. In fact, it is usually by far the most expensive and least effective. And why spend the money at all? This directly from the S-1 filing that nobody has bothered to read:
We have achieved our rapid growth through a combination of the "push" nature of email payments to non-registered recipients and the "pull" nature of Web Accept. During the three months ended June 30, 2001, our account base grew by an average of 18,000 per day, with virtually no traditional sales or marketing.
Only an idiot would spend money to buy customers through conventional advertising -- at a cost of several hundred dollars per customer obtained, when you can get a "measely" 1.6 Million customers in 3 months (18K x 3 months x 30 days) by "riding on the backs of sellers on ebay". But how exactly are they "riding on our backs" if they are not yet profitable? Such a derogatory term usually implies that the one doing the riding is making a profit at your expense, not losing money while helping you. And if they're not helping the eBay sellers, then those "stupid" eBay sellers wouldn't be advertising for PayPal in the first place. They would be using the great and wonderful BillPoint instead.
posted on September 30, 2001 07:43:45 PM
Who said anything about "traditional" advertising? I certainly did not.
Who said anything about "conventional" adverstising? I certainly did not.
Paypal did NOT build their base of users from the
"push" nature of email payments to non-registered recipients and the "pull" nature of Web Accept"
They built it by their $5.00 referral in the beginning by getting sellers to advertise on ebay for them. They could not have built their business without ebay and its sellers.
Are you trying to say that paypal.com made it big using yahoo and amazon? ROFL!
DJ
posted on September 30, 2001 07:44:32 PMStormthinkerI suggest that rather than folks crying about "the sky is falling", that they actually *read* the SEC filing for themselves.
It'll never happen Stormthinker. The sky is falling is a staple of internet message boards. The SEC filings does offer some interesting information otherwise PayPal wouldn't have filed for the IPO, and there is no doubt that some big money investors will be taking advantage of the IPO offering for obvious reasons.
Big money financiers and many eBay sellers aren't exactly known to run in the same circles or get there info from the same sources.
On the subject of paying for customers, I believe AOL was paying $98.00 per new customer the last time I looked in advertising, agreements with computer manufacturers, and the ubiquious CD mailings they supply.
posted on September 30, 2001 08:05:50 PM
onecentmusic,
OK. So how do you explain the 1.6 Million customers that PayPal gained this last quarter? They certainly weren't giving away 5 dollar bills to do it. So their statement does indeed appear true.
"They could not have built their business without ebay and its sellers."
That obvious and factual comment is certainly not the same as your first one about "instead choosing to ride on the backs of sellers", which was clearly derogatory and implied impropriety on their part. Not one seller has ever been forced to advertise for PayPal against their will -- they did it because of their own "selfish" desire for profit.
posted on September 30, 2001 08:56:14 PM
is this a nursery brawl?
if paypal is not here to make a profit(which it is not yet) then why is it here??
do we have underage aw members here ??
shall we all eat cookies and take a nap in the afternoon?? and get up and whine and whine because we have a bad dream that mummy and daddy go to work and their employer is riding on their back?
so they can come home and keep a roof over some juvenile aw member with pc and phone line ?? and entertain herself/himself listing a few items on ebay.
posted on September 30, 2001 09:00:37 PM
I never said the "sky is falling" (someone else said the same thing) for ebay, that is for certain. Paypal is more questionable, their fiscal report is not one that a solid company would want.
Stormthinker:
I would love to get into a personal fight here, but when you use words such as "stupid" and "idiotic" in reference to me and my posts, I don't think I will go that low. This board is used in discussion and that what I was doing.
You go right ahead and support paypal.com all you want. Paypal is far from a secure investment and shows clearly that is has never made a profit, and does not show an accurate timeline of WHEN they will be profitable. There are also several states investigating their practices and misrepresentation.
They DID ride on the backs of sellers in every listing that offered paypal.com. REGARDLESS whether the sellers agreed or not, that was the majority of their advertising. It is NOT the sellers I am putting down here, but the fact that Paypal USED Ebay (not us, but through us) to build their business. The sellers are motivated by profit, so is ebay and paypal.com.
Correct me if I am wrong, but ebay HAS used traditional means of advertising and cyberspace means. I don't know what ebay's marketing budget it, but to have television commercials, etc, it must be substantial.
Simply put, paypal.com is not on sound financial footing (upon READING the SEC filing) and is looking to shore up their business through IPO. Sure this will buy them some time, but how long is it going to last? The way IPO's go through cash is apalling.
