EBay’s IPO Greeted at Top of Range of Expectations

EBay Inc., operator of the most active Internet auction site, raised $63 million Wednesday in the first initial public stock offering to hit the market in four weeks.

The San Jose-based company sold 3.5 million shares at $18 each, the top of the $16-to-$18 range set by lead underwriter Goldman, Sachs & Co. Goldman raised the expected range by 13% earlier Wednesday, from $14 to $16.

The IPO gave the 3-year-old company a market capitalization of $715 million and its 31-year-old founder, Pierre Omidyar, a stake worth about $274 million.

EBay’s shares are expected to do well when they begin trading today on Nasdaq, analysts said, even though the market for IPOs has been battered for months and the Nasdaq composite stock index has dropped 13% since July 20. On Wednesday, however, Nasdaq soared 62.47 points, or 3.7%, to 1,760.27 amid a broad rally on Wall Street.

“EBay is one of the few Internet companies that is currently profitable, and that really has piqued investors’ interest,” said Steven Tuen, an analyst with IPO Value Monitor.

EBay’s revenue rose to $14.9 million for the six months ended June 30 from $1.7 million in the year-ago period. Net income fell to $215,000 from $486,000 because of a sharp increase in operating expenses, the company said.

The EBay Web site is used by buyers and sellers of personal items such as antiques, coins, collectibles, computers, memorabilia, stamps and toys. More than 15 million sales worth over $340 million have been completed on the site. At the end of August, EBay had more than 1 million users, up from about 340,000 at the beginning of the year, the company said in its filing with the Securities and Exchange Commission.