Set in the fall of 1998, this case series (see also the A case, UVA-F-1357) examines the decision by eBay management to proceed with the company's initial public offering during the quietest IPO market in 20 years. In the A case, eBay's chief financial officer considers the financial and competitive implications of delaying the offering, as well as the challenge of fairly pricing the shares of an emerging, unseasoned Internet stock. The case provides an excellent forum for students to discuss the costs and benefits of going public. The B case reviews the events of eBay's first trading day and the associated 160% return on the shares. With such a backdrop, students are exposed to one of the well-known finance anomalies--IPO underpricing--and are invited to discuss various proposed explanations. The case series provides opportunities for the instructor to develop the following teaching objectives: (1) review the institutional aspects of the equity-issuance transaction, (2) explore the costs and benefits associated with public share offerings, (3) examine the impact of market turbulence on the IPO market, (4) develop an appreciation for the difficulty of valuing unseasoned firms, and (5) evaluate the received explanations of various finance anomalies, such as IPO underpricing
