PayPal had never achieved a profitable quarter when it began trading on the NASDAQ stock exchange in February 2002. It reported a profit for the first time that quarter (Q1 2002), when it earned $48.8 million in revenue – up 248% year-over-year. How times have changed!
PayPal President Dan Schulman revealed on Thursday that the company will again trade under the symbol PYPL when it goes public after the split with eBay, expected to be completed in the third quarter.
But PayPal didn’t trade long on NASDAQ 13 years ago. Five months after going public, it agreed to be acquired by eBay. (Could history repeat itself with another suitor waiting in the wings?)
While PayPal has an operating agreement with eBay that lays out how the two companies will work together after the split and is outlined in its current Form 10, PayPal made it clear in 2002 in its very first Form 10 filing with the SEC that it relied on eBay but had no contractual relationship.
In fact, as it noted at the time, eBay owned a majority stake in a rival payment service formerly known as Billpoint. “eBay could choose to restrict or prohibit its sellers from advertising PayPal for payments or compel sellers to use eBay Online Payments on eBay’s site. Whether or not eBay imposes such restrictions, we expect eBay to continue to develop and promote its own payment service and to integrate that service tightly into its site in order to foster the use of its payment service.”
Yet despite eBay’s attempts to get its buyers and sellers to use Billpoint, PayPal had emerged as “the payment method of choice for small to medium-sized businesses on eBay” and that, “as of June 30, 2001, 66.4% of all eBay auctions explicitly accepted PayPal.”
And look who else PayPal was competing against 13 years ago: Yahoo! PayDirect offered by Yahoo!; c2it offered by Citigroup; email payment services offered by the U.S. Postal Service through CheckFree; and MoneyZap and BidPay offered by Western Union, according to the old filing.
Schulman, who joined PayPal in the fall, wrote, “We’re in possibly the greatest period of change and transformation in the history of money and financial services. Everything about how commerce works is in flux. And, in Thursday’s post, he said he was “honored and thrilled” that PayPal was returning to its roots as an independent company, and shared his vision.
Moving forward we intend to create the operating system for a world in which all commerce is digital commerce. We’ll become an everyday part of people’s lives by continually making it faster, simpler, and safer to manage and move money. We’ll deliver capabilities, services, and platforms that are technology and payment agnostic, so that our solutions work the way our customers want and need them to. We’ll provide tools that enable developers and innovators to build next generation apps and invent new business models. We’ll be the comprehensive solution partner that merchants around the world rely on to thrive as they reach for their own vision of success.
Apparently he’s excited – on Thursday, PayPal posted a video on YouTube to celebrate the pending return to NASDAQ.
You can read his full post on the PayPal blog, and you can find the full list of PayPal’s new board of directors, also announced on Thursday, in today’s Newsflash.