eBay 2002 Annual Report Download - page 67

thus may face Ñnancial exposure if exchange rates move rapidly or if the rate is set incorrectly. As
exchange rates vary, net sales and other operating results, when translated, may diÅer materially from
expectations. In particular, to the extent the U.S. dollar strengthens against the Euro, our European
revenues and proÑts will be reduced as the result of these translation adjustments.
Our stock price has been and may continue to be extremely volatile.
The trading price of our common stock has been and is likely to be extremely volatile. Our stock
price could be subject to wide Öuctuations in response to a variety of factors, including the following:
‚ actual or anticipated variations in our quarterly operating results;
‚ unscheduled system downtime;
‚ additions or departures of key personnel;
‚ announcements of technological innovations or new services by us or our competitors;
‚ changes in Ñnancial estimates by securities analysts;
‚ conditions or trends in the Internet and online commerce industries;
‚ changes in the market valuations of other Internet companies;
‚ developments in regulation;
‚ events aÅecting PayPal's business;
‚ announcements by us or our competitors of signiÑcant acquisitions, strategic partnerships, joint
ventures or capital commitments;
‚ unanticipated economic or political events;
‚ sales of our common stock or other securities in the open market; and
‚ other events or factors, including these described in this ""Risk Factors That May AÅect Results of
Operations and Financial Condition'' section and others that may be beyond our control.
In addition, the trading prices of Internet stocks in general, and ours in particular, have experienced
extreme price and volume Öuctuations in recent periods. These Öuctuations often have been unrelated or
disproportionate to the operating performance of these companies. Notwithstanding a sharp decline in the
prices of Internet stocks in general, the valuation of our stock remains extraordinarily high based on
conventional valuation standards such as price-to-earnings and price-to-sales ratios. The trading price of
our common stock has increased enormously from the initial public oÅering price. This trading price and
valuation may not be sustained. Negative changes in the public's perception of the prospects of Internet or
e-commerce or technology companies have in the past and may in the future depress our stock price
regardless of our results. Other broad market and industry factors may decrease the market price of our
common stock, regardless of our operating performance. Market Öuctuations, as well as general political
and economic conditions, such as recession or interest rate or currency rate Öuctuations, also may decrease
the market price of our common stock. In the past, following declines in the market price of a company's
securities, securities class-action litigation often has been instituted. Litigation of this type, if instituted,
could result in substantial costs and a diversion of management's attention and resources.
New and existing regulations could harm our business.
We are subject to the same foreign, federal, state and local laws as other companies conducting
business on and oÅ the Internet. Today there are relatively few laws speciÑcally directed towards online
services. However, due to the increasing popularity and use of the Internet and online services, many laws
relating to the Internet are being debated at the state and federal levels (both in the U.S. and abroad) and
it is possible that laws and regulations will be adopted with respect to the Internet or online services.
These laws and regulations could cover issues such as user privacy, freedom of expression, pricing, fraud,
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