I have decided to buy puts on VISA. When the Visa IPO came out, I believed that V was way overpriced. There was a lot of hype during the IPO yet it fell and dropped like a rock. The SPY made a 3.5% move today yet V was in the red the entire day. There is a smell in the air and this was one is toast. There are no short shares available yet so I bought some long dated in the money puts. However, I think it might be better to be more aggressive. Had this stock IPOed 2 years ago then it would have been at 10. Its all baked into the cake now and my expectation is for V to drop like a rock during next earnings call. In a similiar move, I had bought puts on the Fortress IPO and the Blackstone IPO. I have also shorted both and added to those short positions all the way down. My opinion is that there was so much hype during those IPOS and they were wildly overpriced. I know that both these companies will go the way of Neiderhoffer and Amaranth. They will shutter their doors one day and thats not if, but when. Visa is done, stick a fork in it. Trade your mastercard as the sweet overvalued trade vehicle it is, but the VISA IPO is for those who like to go short. Short or buy puts on VISA.
Trading Rule 101, never short a hot ipo...ever. v didnt even move much. unless you holding intraday for daytrading...
Visa has over 750 million shares outstanding and everyday right at the same time someone steps in to dump huge blocks down. Its almost as if someone is trying to flip more of their IPO shares down on us each and everyday inflicting yet more downside. I bet the upside in the market today was taken full advantage by share dumpers dumping yet more shares into the strength of the market. Dont think and believe this will be the next Mastercard. That has only 110 million shares outstanding and most shares are being held tight by some of the more popular mutual funds and investment banks. Not one of those holders is going to get near Visa because you simply dont hold two credit card stocks at once. As the SPY surged into the close today some 3.5% strong on volume, someone was quietly dumping their Visa surges and V closed at new lows. Is this a hot new IPO? No, its a turd. Short it when shares become available.
vonage was not a hot ipo, it was a disaster at the get go, how a company with hundreds of millions in debt can go ipo is beyond me. Basically just the thieves cashing out their loot to the investors. goog, vmw, bx, v etc are hot ipos, only bx tanked amid the financial crisis, rest all went up shortly after ipo. My point is, it's just not worth it when there are so many other fish in the pond to choose from.
V is dead money... there are much better shorts out there, and much better longs. Once the insider dumping phase finishes, it'll probably trade with 1.0 beta.
If I was going to do anything with Visa options it would be buy a semi-long term straddle position or selling a short term straddle with about a 62.50 Strike. The truth of this stock is it's "all time" (it's only been trading for 9 days) high and low were on the same day...opening day. There is no history, no trend, and no real support or resistance yet. Any predictions made as to where this will go is pure speculation and could just as easily be decided with the flip of a coin. Either bet it will move or it won't, don't try to get direction right as well...just yet.
A lot of the hype comes from the MA IPO a couple years ago. "wow omg wtfbbq check out MA's growth in price compared to V" Who knows, not worth the risk to short IMO