Now, I have a pretty good idea on what your thoughts on PayPal is... But what do you all think about the
coming Paypal IPO? I mean, Paypal rakes it in doesnt it?
coming Paypal IPO? I mean, Paypal rakes it in doesnt it?
Paypal IPO :: Your Thoughts
- Thread starter hevnsnt
- Start date
Geekbabe
Moderator Emeritus<br>Elite Member
<< I mean, Paypal rakes it in doesnt it? >>
Oh yeah, they're raking it in all right. To the tune of a $170 million net LOSS last year, and bleeding about $25 million a quarter right now. The IPO funds might keep them alive another six to nine months.
Russ, NCNE
Oh I totally agree on not too buy.. but I was not aware of their loss.. Where is all their money going?
<< Where is all their money going? >>
Good question. Like most dot.com pure plays, they realized too late that you actually have to take in more then you pay out if you want to stay in business. Last year their total revenue was something like only $14 million. They, like many, have grown fast, but the losses have grown right along with revenue.
They are like a bank, without all the other revenue sources that a traditional bank has. You cannot earn enough on just small processing fees to cover costs. If credit card processors got nothing but the two to three points from merchants (and no interest or fees on balances), they would never survive. This is what Paypal has been attempting to do.
Russ, NCNE
They waited too late. Now that Paypal has proven that people actually like P2P online payments, the major banks have taken notice and setup their own P2P online payments, except with better security and customer protection.
<< Last year their total revenue was something like only $14 million. >>
Actually they made $105 million in 2001, up from $14 million in 2000. But you're close.
<< You cannot earn enough on just small processing fees to cover costs. >>
What happened to Ebay?
Whaddaya know, there's an article on Certapay
<< "Canada will have the largest P2P penetration of any country in the world literally overnight. We have the opportunity of being at the forefront of shaping this new payment infrastructure." >>
<< PayPal of Palo Alto, Calif., is considered the leader with an estimated 10 million customers. Using PayPal's service, a person sends somebody an e-mail that says "You've Got Cash!" The recipient clicks on a PayPal link and is directed to a Web site where the money can be transferred to a bank account. >>
<< CertaPay's system is different because, like Canada's ATM network, it operates within an existing banking infrastructure that directly affects most Canadians. You're not dealing with a single dot-com or bank ? you're dealing with a system of trusted institutions, making it easier to achieve a "comfort zone" with consumers.
"We're not asking the consumer to have a relationship with a new party," says Ginsberg, though he admits it would be difficult to introduce a similar service into the highly fragmented U.S. banking sector.
He draws a comparison to ATMs: "In the States, there are close to 12 ATM networks. In Canada, there is one. If you get the largest American bank, you may get only 8 per cent of the U.S. market."
That's why Canada looks so good ? and why most of our banks are ready and willing. Ginsberg says Scotiabank will likely be the first out of the gates. He adds that CertaPay is still in negotiations with Royal Bank and "we're hoping to have something positive to say very, very soon."
With the country's major banks signed up, there's no telling how quickly Canadians will embrace the service. According to a recent survey conducted by the Canadian Bankers Association, more than 60 per cent of consumers do a majority of their banking through electronic channels ? whether through ATM, the Internet, or over the telephone.
Canadians are also known for being the world's heaviest users of debit cards. In fact, we make twice as many debit-card transactions per year than our cousins south of the border. >>
Hmm, Certapay is privately held. I think I'd rather invest in them when they go IPO LOL. Why didn't Paypal go the same route by partnering with real banks?
<< "Canada will have the largest P2P penetration of any country in the world literally overnight. We have the opportunity of being at the forefront of shaping this new payment infrastructure." >>
<< PayPal of Palo Alto, Calif., is considered the leader with an estimated 10 million customers. Using PayPal's service, a person sends somebody an e-mail that says "You've Got Cash!" The recipient clicks on a PayPal link and is directed to a Web site where the money can be transferred to a bank account. >>
<< CertaPay's system is different because, like Canada's ATM network, it operates within an existing banking infrastructure that directly affects most Canadians. You're not dealing with a single dot-com or bank ? you're dealing with a system of trusted institutions, making it easier to achieve a "comfort zone" with consumers.
"We're not asking the consumer to have a relationship with a new party," says Ginsberg, though he admits it would be difficult to introduce a similar service into the highly fragmented U.S. banking sector.
He draws a comparison to ATMs: "In the States, there are close to 12 ATM networks. In Canada, there is one. If you get the largest American bank, you may get only 8 per cent of the U.S. market."
That's why Canada looks so good ? and why most of our banks are ready and willing. Ginsberg says Scotiabank will likely be the first out of the gates. He adds that CertaPay is still in negotiations with Royal Bank and "we're hoping to have something positive to say very, very soon."
With the country's major banks signed up, there's no telling how quickly Canadians will embrace the service. According to a recent survey conducted by the Canadian Bankers Association, more than 60 per cent of consumers do a majority of their banking through electronic channels ? whether through ATM, the Internet, or over the telephone.
Canadians are also known for being the world's heaviest users of debit cards. In fact, we make twice as many debit-card transactions per year than our cousins south of the border. >>
Hmm, Certapay is privately held. I think I'd rather invest in them when they go IPO LOL. Why didn't Paypal go the same route by partnering with real banks?
<< Actually they made $105 million in 2001, up from $14 million in 2000. But you're close. >>
Looks like I was a year off. They didn't "make" $105 million, they had revenues of that amount. Their net loss was HIGHER then their total revenue, and they have very little left of the $225 million they've already sucked out of the VC market. To this day, they are bleeding red ink by the bucketful.
<< What happened to Ebay? >>
eBay's processing fees are HUGE compared to Paypal because they have multiple sources of revenue. They also did not start out by giving everything away for free; they had fees from the beginning. They also went public when the market was hot, now it's dead.
Feel free to jump on the IPO, though. I'm sure they'd love to have your money.
Russ, NCNE
<< Actually they made $105 million in 2001, up from $14 million in 2000. But you're close.
Looks like I was a year off. They didn't "make" $105 million, they had revenues of that amount. Their net loss was HIGHER then their total revenue, and they have very little left of the $225 million they've already sucked out of the VC market. To this day, they are bleeding red ink by the bucketful. >>
Revenue is basically the same thing as how much they made (or how much flowed into the compnay). I didn't mention anything about profits (which I realize are in the red).
<< What happened to Ebay? >>
eBay's processing fees are HUGE compared to Paypal because they have multiple sources of revenue. They also did not start out by giving everything away for free; they had fees from the beginning. They also went public when the market was hot, now it's dead.[/i] >>
I don't think the market for Paypal is dead at all. In fact, I think the market for instant transfer of funds is growing more now than it ever was before as people are more and more inclined to save the time and hassle of going to the local Post Office or Bank to get money orders or send out checks. In the beginning of 2000, Paypal had 12,000 users. 6 months later, it was up 18,000 percent to 2.2 million users. Last September, it had reached 10 million personal users and 2.2 million business accounts...yeah, I'd say there's a market for Paypal... As for their processing fees, Ebay charges between 1-5% of whatever you're selling on top of a couple dollar listing fee. Paypal charges around 2-3 percent of the transaction so I'd say the processing fees aren't too far off.
What's different about this dot.com versus the other dot.coms which went belly up is that this site, like Ebay, provides a service, rather than goods. Therefore, a lot of the maintainence, and shipping and much of the other costs which plagued the other dot.coms do not apply to sites which offer services. Granted, I realize that there is still quite a bit of fat that probably needs to be cut from their middle management, but I believe they should be profitable by next year and will be able to hold their own much like Ebay.
As for banks installing their own direct pay services, Citibank already has installed their own c2it direct pay, but of all the direct pay systems, it only garners about 1 percent of the direct pay online transactions. Paypal, I believe has already garnered too much of the market for other companies to catch up. This is one of the reasons why Yahoo! Auctions hasn't really done too well over Ebay even though the listings were completely free a year or 2 ago when Ebay was charging for listings.
Anyway, do what you will. I do believe that this is one of the best IPOs you'll be seeing this year, but like most IPOs as well as stocks, I wouldn't invest all your children's college funds in it.
<< In the beginning of 2000, Paypal had 12,000 users. 6 months later, it was up 18,000 percent to 2.2 million users. Last September, it had reached 10 million personal users and 2.2 million business accounts...yeah, I'd say there's a market for Paypal >>
Exactly the same argument was made for Excite@home, exodus.net and a whole host of other companies that went bankrupt. Rapid growth does not equal profitability. This stock is a dog.
<< Anyway, do what you will. I do believe that this is one of the best IPOs you'll be seeing this year >>
Then jump on it. I'll do my best to fend off the urge to say "I told you so" when they go tits up and you lose your money.
Russ, NCNE
Regardless who goes "tits up" or not.. I think this will turn out to be very interesting for other .com's
- Oct 30, 2000
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There was an article a couple of weeks ago that indicated that Paypal itself did not think they would ever be profitable.ATOT Thread - See Russ's reference link
If a company can not make any money, then it is just sucking funds from the stock holders/investers and can not succeed in the long term. The only chance to make money from Paypal would be to jump in before everyone else sees the true picture and get out quickly. You may make $$$ on speculation only, not in the long term investment.
If a company can not make any money, then it is just sucking funds from the stock holders/investers and can not succeed in the long term. The only chance to make money from Paypal would be to jump in before everyone else sees the true picture and get out quickly. You may make $$$ on speculation only, not in the long term investment.
This is causing quite the stir in the online gambling community, as we fund most transactions thru paypal. Many people, includijng myself, have upwards of 10K+ in paypal. Three of my friends keep upwards of 50K in paypal all the time. If paypal keels, then we would be screwed beyond belief. TechTV did an expose a few days ago on paypal and their shoddyness, I think it re-airs tommorow night. One of the interesting points made was that until a year ago they only had three employees in customer service.
<< This is causing quite the stir in the online gambling community, as we fund most transactions thru paypal. Many people, includijng myself, have upwards of 10K+ in paypal. Three of my friends keep upwards of 50K in paypal all the time. If paypal keels, then we would be screwed beyond belief. TechTV did an expose a few days ago on paypal and their shoddyness, I think it re-airs tommorow night. One of the interesting points made was that until a year ago they only had three employees in customer service. >>
...and that is why a fool and his money are soon parted. Anyone who looses money through PayPal by means of an account, IPO or otherwise deserves exactly what they get.
<< The only chance to make money from Paypal would be to jump in before everyone else sees the true picture and get out quickly. You may make $$$ on speculation only, not in the long term investment. >>
Exactly! Even if the company goes belly up after a few years, I plan on having my money far from Paypal. How does the saying go? "You don't need to outrun the bear..."
- Oct 30, 2000
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<< You do not need to outrun the bear >>
But you need to make sure that some-one else is in the race also.
Many of these IPOs have the buys setup with a sell already in place.
You will need to make sure that you can get your buy in and turn it around before reality hits.
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