PayPal filed to go public 17 days after the September 11 attacks, and its stock jumped 55 percent on day one. The dot-com bubble had burst. Investors had stopped buying internet stories. PayPal had something rarer: millions of people who used it every day to pay for things they won on eBay. It let anyone with an email address send money, and it became the first internet IPO since Loudcloud in March 2001.

Two Startups, One Wallet

PayPal began as Confinity, founded in 1998 by Max Levchin, Peter Thiel, Luke Nosek, and Ken Howery. Its first idea was to beam money between Palm Pilots. Email payments worked better. In March 2000 Confinity merged with X.com, the online bank started by Elon Musk. The combined company took the PayPal name. Its growth came from eBay sellers, who put PayPal buttons on their auctions because buyers already had accounts.

Sold Before the Ink Dried

PayPal priced its offering at $13 a share in February 2002 and closed its first day at $20.09. It stayed public for only a few months. In October 2002 eBay bought PayPal for about $1.5 billion in stock. For thirteen years PayPal ran inside eBay as its payments arm. In July 2015 eBay spun it off as its own company again, and PayPal still trades on Nasdaq under PYPL.

Cover: Lady Reading the Letters of Heloise and Abelard, Bernard d'Agescy. Art Institute of Chicago, public domain. Chosen for a lady reading her letters (money sent like a note between pals).