Market new boy PayPal begins to fall to earth

eBay deal spoils everyone's dreams of a dot-com success story...

By Sonya Rabbitte, 25 February 2002 11:30

NEWS Shares in PayPal are hovering close to the $13 issue price, after tumbling almost 12 per cent Friday on news that eBay has invested in arch rival Billpoint. PayPal shares, which traded at over $20 during its first week on the market, fell to $13.24, and dropped almost another one per cent in after hours trading. eBay, which PayPal counts among its biggest user base, paid $43.5m for a 35 per cent stake in Billpoint. PayPal, the first dot-com to IPO on the Nasdaq since last March, far outstripped analysts' expectations when it debuted two weeks ago. Shares jumped to over $20 within hours of trading commencing, and the stock price held steady above the $18 mark during the first week.

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