eBay 2000 Annual Report Download - page 63

eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Ì The Company and Summary of SigniÑcant Accounting Policies:
The Company
eBay Inc. (""eBay'') was incorporated in California in May 1996, and reincorporated in Delaware in
March 1998 and by December 31, 2000 had operations in the United States, Switzerland, the United
Kingdom, Germany, France, Austria, Australia, Canada, and Japan. eBay pioneered online personal trading
by developing a Web-based community in which buyers and sellers are brought together to buy and sell almost
anything. The eBay online service permits sellers to list items for sale, buyers to bid on items of interest and all
eBay users to browse through listed items in a fully-automated, topically-arranged service that is available
online seven days a week. eBay's acquisition of Half.com, Inc. (""Half.com'') enables eBay to oÅer an online
website to buy and sell using a Ñxed-price trading platform. eBay also engages in the traditional auction
business through its subsidiaries, ButterÑelds Auctioneer Corporation (""ButterÑelds'') and Kruse Interna-
tional (""Kruse'') and in online payment processing through its Billpoint, Inc. (""Billpoint'') subsidiary.
Reincorporation
As a result of the reincorporation in April 1998, eBay was authorized to issue 180,000,000 shares of
$0.001 par value common stock and 6,000,000 shares of $0.001 par value Preferred Stock. The Board of
Directors and the stockholders subsequently amended the number of authorized shares such that eBay was
authorized to issue 900,000,000 shares of common stock and 10,000,000 shares of Preferred Stock. The Board
of Directors has the authority to issue the undesignated Preferred Stock in one or more series and to Ñx the
rights, preferences, privileges and restrictions thereof.
Stock split
During January 1999 and April 2000, eBay's Board of Directors approved a three-for-one and two-for-one
common stock split, respectively. Stockholders of record on February 9, 1999, received two additional shares
on March 1, 1999. Stockholders of record on May 9, 2000, received one additional share for each share owned
on May 24, 2000. All share and per share amounts in these consolidated Ñnancial statements and notes thereto
for all periods presented reÖect the stock splits in all periods presented.
Public oÅerings
On September 24, 1998, eBay completed its initial public oÅering of 24,150,000 shares of its common
stock which were sold at a price of $3.00 per share. Of the 24,150,000 shares, 64,000 shares were sold on
behalf of a charitable foundation established by eBay. The proceeds resulted in net proceeds to eBay of
approximately $66.1 million. At the closing of the oÅering, all issued and outstanding shares of eBay's
Convertible Preferred Stock and Mandatorily Redeemable Convertible Preferred Stock were converted into
an aggregate of 55,654,038 shares of common stock.
On April 16, 1999, eBay completed a follow-on public oÅering of common stock. A total of 8,500,000
shares were sold by eBay at a price of $85.00 per share. The oÅering resulted in net proceeds to eBay of
approximately $696.2 million.
Sale of subsidiary stock
W ELLS F ARGO B ANK
On February 24, 2000, Billpoint and Wells Fargo Bank (""Wells Fargo'') entered into an agreement
whereby Wells Fargo became the exclusive provider of Internet payment services of domestic transactions for
Billpoint's customers. The service agreement expires February 28, 2007.
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