---
aliases:
- PayPal, Inc.
- X.com Corporation
- Confinity
category: Private Organization
created: 2026-09-22
end: 2002-10-03
location: Palo Alto, California
relations:
- fn: 1
  reverse: true
  role: co-founder of Confinity
  start: 1998-12
  type: founded
  with: '[[Peter Thiel]]'
- fn: 1
  reverse: true
  role: founder of X.com
  start: 1999-03
  type: founded
  with: '[[Elon Musk]]'
- end: 2002-10-03
  fn: 1
  reverse: true
  role: chief executive and president
  start: 2000-09
  type: head_of
  with: '[[Peter Thiel]]'
- end: 2000-09
  fn: 1
  reverse: true
  role: chief executive
  start: 2000-05
  type: head_of
  with: '[[Elon Musk]]'
- fn: 4
  reverse: true
  start: 2002-10-03
  type: owned
  with: '[[eBay]]'
start: 2000-03-30
summary: Online payments company formed in 2000 by merging Elon Musk's X.com with
  Peter Thiel and Max Levchin's Confinity, run by Thiel from September 2000, floated
  in February 2002 and sold to eBay that October.
tags:
- Organization
- Payments
- SiliconValley
- PeterThiel
- ElonMusk
- PayPalMafia
updated: 2026-09-23
---

PayPal, Inc. "resulted from a merger between Confinity, Inc., incorporated in December 1998, and X.com Corporation, incorporated in March 1999." [Peter Thiel](/people/peter-thiel/) and [Max Levchin](/people/max-levchin/) co-founded Confinity; [Elon Musk](/people/elon-musk/), earlier a co-founder of Zip2, founded X.com, which "intended to provide Internet banking services." On March 30, 2000, X.com merged with Confinity, X.com surviving; by October 2000 the company had abandoned internet banking for the PayPal product, and it took the name PayPal, Inc. in February 2001. Musk was chief executive of X.com from March to December 1999 and of PayPal from May to September 2000, when Thiel, a former Sullivan & Cromwell lawyer and derivatives trader, replaced him; Levchin was chief technology officer. In September 2001 Musk was the largest shareholder, with 14.2 percent, ahead of entities affiliated with Sequoia Capital (10.7 percent), whose partner Michael Moritz sat on the board, and Nokia Ventures (9.6 percent); Thiel held 5.6 percent and [Reid Hoffman](/people/reid-hoffman/) under one percent.[^1]

The company then had 10.0 million registered users, most of whose payments concerned online auctions. It disclosed that "during the four months between July and October 2000, we experienced a significant fraud episode," with gross losses from unauthorized charge-backs of 5.7 million dollars, and that MasterCard had fined it for excessive charge-backs.[^1]

### Flotation and Sale

PayPal sold 5,400,000 shares at 13 dollars in its initial public offering, under a prospectus dated February 14, 2002, on the Nasdaq National Market as PYPL.[^2] On July 8, 2002, eBay announced that it would acquire the company. The merger was completed on October 3, 2002, at 0.39 of an eBay share for each PayPal share, a transaction eBay valued at about 1.5 billion dollars, and Thiel resigned as chief executive the same day.[^3][^4] Members of the founding group went on to found or lead LinkedIn, [Palantir Technologies](/organizations/palantir-technologies/), [Founders Fund](/organizations/founders-fund/), Tesla and SpaceX, and became known as the [PayPal Mafia](/organizations/paypal-mafia/).[^5]

[^1]: PayPal, Inc. Form S-1 registration statement, filed September 28, 2001, SEC file no. 333-70438, "Risk Factors," "Management's Discussion and Analysis," "Management" and "Principal Stockholders." https://www.sec.gov/Archives/edgar/data/1103415/000091205701533855/a2059025zs-1.htm
[^2]: PayPal, Inc. Prospectus, Rule 424(b)(4), February 14, 2002. https://www.sec.gov/Archives/edgar/data/1103415/000091205702006471/a2071068z424b4.htm
[^3]: eBay Inc. and PayPal, Inc. "eBay to Acquire PayPal." Press release, July 8, 2002, filed as exhibit 99.1 to PayPal's Form 8-K. https://www.sec.gov/Archives/edgar/data/1103415/000091205702026650/a2084015zex-99_1.htm
[^4]: PayPal, Inc. Form 8-K, October 4, 2002, and exhibit 99.1, "eBay Completes PayPal Acquisition," October 3, 2002. https://www.sec.gov/Archives/edgar/data/1103415/000091205702037693/a2090698zex-99_1.htm
[^5]: Cameron, Dell, and Yulia Almazova. "Leak Exposes Members of Peter Thiel's Secretive 'Dialog' Society." *WIRED,* June 16, 2026. https://www.wired.com/story/leak-exposes-members-of-peter-thiels-secretive-dialog-society/