Shares of Internet payment service firm
were rising more than 49% in their debut of trading Friday.
After being delayed more than a week, PayPal priced 5.4 million shares at $13, the middle of its $12 to $14 range, in an initial public offering Friday. Salomon Smith Barney led the deal, which raised $70.2 million.
In recent trading, the stock was up $6.41 to $19.45. This performance compares to an average 6% gain for Internet service and software stocks on their first day of trading in 2001, and an increase of 76% in 2000.
The PayPal offering was initially delayed from Feb. 6 due to a patent-infringement suit from competitor
. The rival alleged violation of an electronic-payment and transaction-system patent. In an amendment to its SEC filing this week, PayPal fully denied CertCo's claim.
When the suit was filed, some analysts said the timing of it was suspect. Whether or not CertCo's claim is legitimate, they thought it was unlikely the company didn't know about it six months ago.
"It's possible they were more conservative in pricing than they would have been otherwise, because of all the problems," said Marc Baum, an analyst at IPO.com, an independent research firm.
PayPal's problems extend beyond the CertCo lawsuit, however. In an amendment to its SEC filing Tuesday, PayPal said that Lousiana had ordered it to stop providing its service there until it obtains a money-transmission license. Other states, including California, New York and Idaho, have notified the company that they believe it is or may be an unauthorized banking business.
Thursday PayPal amended its prospectus, saying Louisiana will allow them to do business there, on an interim business, as they review the money-transmission issues.