Online payment company PayPal Inc.'s shares rose considerably on its first day as a public company Feb. 15, gaining nearly 54 percent from its IPO price to close up $7.01 at $20.01.
The company's 5.4 million shares opened at $15.41, more than 18 percent above the $13 initial public offering price set Feb. 14. PayPal had been scheduled to go public earlier this month, but was forced to delay the offering after it was hit with a patent litigation lawsuit and ran into regulatory problems in Louisiana and New York.
PayPal's service enables consumers to make payments to one another over the Internet. The service is popular for person-to-person transactions such as online auctions. EBay customers are among the Palo Alto, CA-based PayPal's largest users.
Just days before it planned to go public two weeks ago, a filing with the Securities and Exchange Commission revealed that on Feb. 7 Louisiana sent PayPal a letter requesting it to stop brokering payments for state residents until it gets a license to do so. New York state also notified the company that it is running an unlicensed banking business.
PayPal could face fines of up to $5,000 per day in New York and $1,000 per day in Louisiana for the time the company offered residents its services, which those states deem to be in violation of their laws. PayPal began offering its service in New York and Louisiana in October 1999. California and Idaho also are investigating the company.
The company's widely anticipated IPO also was delayed because of a patent infringement lawsuit brought against it by technology firm CertCo Inc. CertCo, based in New York, filed the suit in Delaware on Feb. 4.
As a result, shares of the company — which traded on the Nasdaq Stock Market under the symbol PYPL — did not begin trading until Feb. 15.