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« June 30, 2002 - July 6, 2002 | Main | July 14, 2002 - July 20, 2002 »

July 12, 2002

WSJ: Benchmark Capital sues Juniper Financial

The Wall St. Journal reported yesterday that venture capital firm Benchmark Capital has sued one of its portfolio companies: Juniper Financial. The lawsuit involves financings by Juniper in 2001 and a new financing round which is about to happen.

PayPal's underwriters exercise overallotment

PayPal announced this morning that the underwriters of its recently completed secondary offering have exercised their over-allotment option to acquire an additional 900,000 shares from the selling shareholders. Not bad for a few days work -- the underwriters bought those shares for $19.00 -- with the ability to immediately sell them at the post-eBay announcement price of roughly $23.

July 11, 2002

Basel Committee reaches agreement on New Capital Accord issues

In a press release posted on its web site yesterday, the Basel Committee on Banking Supervision reached agreement on a number of issues related to the New Basel Capital Accord proposal.

FDC reports earnings

First Data Corporation this morning reported revenues up 9% and earnings per share up 21% in the second quarter. The company also confirmed its previously provided guidance of 14-17% revenue growth and 15-18% EPS growth for the full year 2002.

July 10, 2002

Newsweek: Halt! Who goes there?

Practical Futurist columnist Michael Rogers writes about the increasing interest in biometrics.
„There are very few technologies that undergo an overnight change,‰ says Raj Nanavati, one of IBG‚s co-founders. „But that‚s what happened to biometrics after September 11.‰

NY Times: Sept 11 hijackers said to fake data on bank accounts

The NY Times reported this morning that 35 bank accounts were opened by the hijackers without legitimate Social Security numbers.

eBay/PayPal deal expected to get anti-trust clearance

Dow Jones is reporting that the eBay/PayPal deal is expected to be approved by antitrust authorities.

Payment Processors: FDC and Concord EFS

Both First Data Corp. (FDC) and Concord EFS (CEFT) have experienced significant declines in the prices of their common stock over the last few days. FDC, currently trading below $33 per share, is scheduled to announce earnings tomorrow morning before the market opens and Morgan Stanley analyst David Togut writes this morning that he views the recent price weakness as a buying opportunity. CEFT is also trading lower this morning with its stock falling 4.5% to $26.28. Intraday low was $26.03. CEFT announces earnings on July 30th. The company gave an investors' presentation at a June 25th William Blair conference. Update: FDC closed at $32.58 after hitting an intraday low of $31.45. CEFT closed at $26.36 after hitting an intraday low of $25.63.

San Jose Mercury News: More PayPal commentary

"I do think we have not done a good enough job convincing the credit card associations that we are a fundamentally complementary service," Sollito said. `"We can be a partner that extends their reach to a host of new customers."

InfoWorld: Microsoft, Liberty Alliance square off again

Eric Dean, chairman of the Liberty Alliance Project and CIO of United Airlines, plans to provide details about the technology July 15 at The Burton Group's Catalyst Conference 2002, according to an invitation distributed Monday to the press. Leading up to its debut next week, few details have been released about the specification, and some industry watchers have started to tag the specification "vaporware." Still, the idea of a standard technology for linking various authentication systems has received an enthusiastic response from a diverse collection of hardware, software, and Internet companies, said David Smith, senior analyst at Gartner.

Fortune: Bank One's Jamie Dimon

The new issue of Fortune has an article about Bank One's CEO Jamie Dimon.
Then, in what seems to be a masterful tonal switch, he turns from pep-rally arrogance to locker-room inspiration. "Winning isn't about patents or your IQ or where you went to school," he says, punching out the clauses in his staccato Queens accent. "It's about one thing--how much you want it!" The crowd is his.

NY Times: FDIC closes 800,000 NextCard accounts today

After failing to sell them, the FDIC is shutting down 800,000 NextCard credit card accounts today -- apparently on one day notice.

July 09, 2002

Microsoft and Arcot introduce .NET service for consumer payment authentication

Card-issuing banks that support online authentication, such as the Verified by Visa and MasterCard Secure Payment Application (SPA) programs for Internet purchases, can enable cardholders to seamlessly link their personal .NET Passport account with the secure, online card authentication of TransFort. Cardholders can log on, shop and authenticate online purchases using a simple and familiar Passport sign-in and interface.
The Wall St. Journal covers the story here. CNET here.

Motley Fool: PayPal is a Rule Breaker

The Motley Fool laments the acquisition of PayPal -- they were just about to add it to their "Rule Breaker" portfolio!
Initally, we were disappointed that PayPal is being acquired. PayPal was one of the most promising Rule Breakers we'd considered. It is already profitable; it leads an important, emerging, and ultimately immense industry -- that of online payment transactions; and, at $20, it had a reasonable valuation. We felt we had a big winner here! We were just about to pounce when eBay swooped it up, buying the company for $1.5 billion -- an 18% premium to last Friday's price. Thanks a lot, eBay! Now, on second thought, we're happy that eBay also saw the value in PayPal, and that eBay -- our portfolio's largest holding -- paid a reasonable price.

NY Times: More on eBay's acquisition of PayPal

More coverage on yesterday's announcement by eBay of its planned acquisition of PayPal. Analyst comments on the deal were generally positive for eBay. One negative (for some folks) is eBay's decision to withdraw PayPal from its use on gambling sites.

July 08, 2002

American Banker: Visa (Tony McEwen) says let the customer choose

Visa believes that the merchants should have to keep their agreement to honor all Visa cards. Our "honor all cards" commitment enables Visa members to provide consumers with all kinds of payment options: Visa cards that are linked to lines of credit, Visa cards that contribute money to charities, Visa cards that provide airline miles, and, of course, Visa cards that are linked to checking accounts. With this lawsuit the merchants, led by Wal-Mart, want to eliminate this choice and limit consumers to one kind of Visa card.

eBay to acquire PayPal

eBay announced this morning that it is acquiring PayPal. EBay is exchanging 0.39 eBay shares for each PayPal share valuing the acquisition at $1.5 billion. At Friday's price, the deal values PayPal at $23.61 per share, an 18% premium over PayPal's Friday closing price. PayPal's IPO in February sold 5.4 million shares and was priced at $13 per share. A secondary offering of 6 million shares was completed in late June (in which all of the shares offered were by selling shareholders) at a price of $19 per share. The transaction is expected to close around the end of the year.
"eBay and PayPal have complementary missions. We both empower people to buy and sell online," said Meg Whitman, President and CEO of eBay. "Together we can improve the user experience and make online trading more compelling. We can also capture greater value from the e-commerce opportunities occurring both on and off our site." "eBay and PayPal have built vibrant user networks on the Internet," said Peter Thiel, Founder and CEO of PayPal. "The beauty of this deal is that it will allow us to offer our communities new tools and added flexibility to do more business. Integrating our services is a win-win situation for millions of current and future online consumers."

Cleveland Plain Dealer: Falling Fed rates save banks money

A report on how banks are profiting from the current interest rate climate. See also this discussion about the article. The article is based upon this year's annual report to Congress by the Federal Reserve on the profitability of credit card operations of depository institutions.

July 07, 2002

SF Gate: Caught in a web (VeriSign)

Staff writer Verne Kopytoff profiles VeriSign and its current troubles. At the core of the problem is the shrinking domain name renewal rate and the impact that is having on revenues -- coupled with some questionable marketing practices by VeriSign in trying to deal with that problem which have brought on litigation.

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