eBay Inc filed yesterday for a secondary public offering of 6.5 million shares, 4.25 million of them new, which will raise around $1bn in all, and $599.3m for the company after expenses, based on Wednesday’s closing price of $146.375. The news caused eBay’s stock to surge, so the actual amount raised could end up being higher. The news was good for a $14.00, or 9.6% rise in the stock to close at $159.375.
The filing also revealed that the company was issued with a patent infringement lawsuit on March 23 by a private San Jose- based company called Network Engineering Software Inc. The patent covers the input, collection, storage and publication of users’ data in a searchable index. The suit was filed in the US District Court for the Northern District of California. NES could not comment on the lawsuit and eBay said at first it would, and then declined. The filing says the suit is claiming monetary damages as well as an injunction against eBay’s operation. The statement says, we believe that we have meritorious defenses against this suit and intend to vigorously defend ourselves.
eBay emphasized that this money is not needed to pay for its share of the four-year marketing agreement with America Online Inc, which was also announced yesterday (see separate story) and all the company would say is that the money will be used for general corporate purposes. However, the filing says the company will use some of the money for investments and acquisitions, though emphasizes that it is not currently in any negotiations regarding possible deals. As of December 31 1998, eBay had cash and short-term equivalents totaling $72.2m.
eBay says that it intends to develop its business in various ways, including helping users with the scanning and uploading of photographs of listed items, authentication and appraisal of the items, and methods to speed buyer’s payments to sellers, such as credit card services. It says it may go to third parties for all or some of these services.
