eBay files to go public

The personal auction site files for an initial public offering, the latest Internet company to go that route.

Personal auction site eBay today filed to go public, the latest Internet company to file for an IPO.

The company proposes to issue shares worth up to $64.8 million, but sources close to eBay's bankers and venture capital backers, Benchmark Capital, think that a $1 billion valuation--the net worth of the company based on its offering price--may be possible because the company already is profitable. No price range for stock shares was listed in the Securities and Exchange Commission filing, nor was the total number of shares to be offered mentioned. Goldman Sachs was listed as the lead underwriter.

The filing comes on the same day that another Benchmark-financed company, PointCast, pulled its initial public offering. (See related story)

As previously reported, ebay was getting closer to filing papers for a public offering.

eBay is a trading community in which individuals and small businesses list items for sale. Buyers then bid on those items, and the company receives a price-based fee for running the auction. During the first half of 1998, eBay's registered users grew from 340,000 to more than 850,000. The site now conducts more than 500,000 simultaneous auctions in 846 categories.

Its prospectus lists 1997 revenues of $5.7 million and net income of $874,000, with $14.9 million in revenue and $348,000 in net income during the first six months of 1998. Gross merchandise sales were $95.2 million last year and $243.7 million during the first half of 1998.

Principal shareholders include founder and chairman Pierre Omidyar, who, prior to the offering, owns 15.2 million shares, or a 42 percent stake in the company. Vice president of strategic planning Jeffrey Skoll holds of 10.2 million shares, or a 28.1 percent stake; Benchmark Funds holds 8.8 million shares, or a 21.5 percent stake; and CEO Margaret Whitman holds 2.4 million unvested shares, or a 6.6 percent stake in the company. In addition, Intuit chairman Scott Cook owns 257,000 shares.

The company will receive proceeds from most of the shares sold in the offering, though the charitable fund eBay Foundation is selling 10,725 shares. That foundation is administered by the Community Foundation of Silicon Valley.

Other underwriters of the offering include Donaldson, Lufkin, & Jenrette, BancAmerica Robertson Stephens, and BT Alex Brown.

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