[ic] PayPal IPO hold up

[Julia Jacobs]

This just in:

PayPal Delays IPO as Rival CertCo Sues Over Patents (Update3)
By Emma Moody

New York, Feb. 6 (Bloomberg) -- PayPal Inc. delayed its initial public
offering, slated to be the first Internet IPO in almost a year, after rival
CertCo Inc. sued the company alleging patent infringement.

PayPal, which provides an e-mail payment system that's popular with EBay
Inc. users, had planned to sell about $76 million in stock tonight through
Salomon Smith Barney Inc. The shares, to be sold at between $12 and $14,
were to trade tomorrow under the symbol PYPL on the Nasdaq Stock Market. A
new date hasn't been set.

CertCo's suit is holding up one of the most sought-after IPOs in months,
said Christopher Ely, who manages the Loomis Sayles Small Cap Growth Fund
with assets of about $175 million.

``We heard it was rivaling some of the IPOs from the good old days in 1999
and 2000,'' he said.

PayPal's IPO was to be the first Internet-related offering since Loudcloud
Inc.'s IPO in March. More than 60 Internet companies were forced to cancel
their IPO plans last year as demand dried up for new companies that hadn't
made a profit.

Loudcloud's shares were issued at $6 and closed today at $3.17. Loudcloud's
sale contrasted with Internet offerings of 1999 and the first quarter of
2000, which often doubled or tripled on their first day of trading.

CertCo filed a federal lawsuit Monday in Delaware, alleging that Palo Alto,
California-based PayPal infringed its 2000 patent by providing
electronic-payment services for online auction systems such as EBay. PayPal
operates as an electronic payment system between users and doesn't involve
the auction service itself.

The suit could dampen demand for PayPal's stock, investors said.

``Even if it's just a nuisance suit, these days if there are any questions,
people react very badly,'' Ely said.

The suit asks for a jury trial, unspecified damages and legal fees from
PayPal.

``CertCo has made significant investment in research and development in
technology relating to systems and methods'' for electronic transactions,
according to the suit by the Cambridge, Massachusetts-based company, which
validates electronic signatures and holds more than a dozen patents.

In 1996, CertCo was spun off by Banker's Trust Corp., now part of Deutsche
Bank AG.

PayPal and CertCo officials were unavailable for comment.

-- 
Julia Jacobs
Currant Media
407-977-4523
Fax 407-261-0176
http://www.currantmedia.com
Members of The Better Business Bureau
* Multimedia Producers
* Web Design & Development
* 2D/3D Graphics/Animation
* Hosting, domain and e-mail
* E-Commerce ­ check, credit card validation