Does Visa Hit The Market for Trading Tomorrow?

Discussion in 'Trading' started by BlueStreek, Mar 18, 2008.


    I know VISA`s CEO rings the opening bell at NYSE tomorrow!!

    But not sure when the $44 opening price hits public markets for trading? Regards
  2. This is the latest news that I could find.

    Business news

    March 18, 2008, 6:20PM
    Visa raises $17.9B in largest US IPO

    By MICHAEL LIEDTKE AP Business Writer
    © 2008 The Associated Press

    SAN FRANCISCO — Visa Inc. raised $17.9 billion late Tuesday to complete the largest initial public offering in U.S. history and help prop up the wobbly financial services industry.

    The world's largest processor of credit and debit cards sold 406 million shares at $44 apiece to easily eclipse the previous U.S. record IPO of $10.6 billion set by AT&T Wireless eight years ago.

    The IPO price topped the range of $37 to $42 per share that Visa set three weeks ago just before its executives began meeting with institutional investors and analysts to drum up interest.

    If investment bankers exercise an option on another 40.6 million shares, Visa's IPO will end up raising $19.7 billion before expenses.

    Visa shares, trading on under the "V" ticker symbol, are scheduled to begin trading Wednesday on the New York Stock Exchange. The San Francisco-based company will debut with a market value of about $36 billion.

    More than $10 billion of the IPO proceeds are being used to buy back some of the shares owned by the banks that have helped build Visa during the past 50 years.

    The money is expected to help banks strengthen their balance sheets as they write off billions of dollars in loans that have soured amid the worst housing slump since the 1930s.

    The Visa windfall will supplement a series of Federal Reserve Bank measures that have pumped billions of dollars into the banking system.

    JPMorgan Chase & Co., Visa's biggest customer and shareholder, is in line for the biggest payoff from Tuesday's IPO — about $1.3 billion, based on figures provided in Securities and Exchange Commission documents.

    That's five times more than New York-based JPMorgan has agreed to pay in a proposed takeover of investment bank Bear Stearns Co., a major casualty of the credit crisis.

    Other big winners in Visa's IPO include: Bank of America Corp., expected to receive roughly $625 million; National City Corp., about $435 million; Citigroup Inc., about $300 million; and U.S. Bancorp and Wells Fargo & Co., both getting more than $270 million.

    All the banks will remain major Visa shareholders.

    The IPO also is expected to generate more than $500 million in fees for Visa's team of investment bankers, led by JP Morgan and Goldman Sachs & Co.

    Besides paying banks, Visa is depositing $3 billion in an escrow account to insulate its shareholders from lawsuits alleging the company profited by stifling competition.

    Those legal headaches are one of the chief reasons that Visa decided to go public and pose the biggest investment risk in the IPO, said Aite Group analyst Gwenn Bezard.

    With loan problems battering the banking industry, Visa executives sold the IPO by positioning their company as a safe haven — a message that apparently resonated with investors.

    "In times like this, you generally see a flight to quality," said Joel Greenberg, a New York attorney who has advised on other IPOs.

    Unlike lenders who have issued nearly 1.5 billion cards bearing its brand, Visa doesn't carry any consumer debt on its books. The company makes its money from processing fees, which have been steadily rising for years, including the past two U.S. recessions in 1991 and 2001.

    Since the latter recession, Visa also has been able to entice consumers to use its credit and debit cards more frequently to pay for staples like groceries, gas and even utility bills. Visa estimates about 42 percent of its transactions fall into this "nondiscretionary" category, up from 27 percent in 2000.

    Visa conceivably could benefit from tougher times if more cash-strapped consumers rely on their credit cards to make ends meet, Bezard said. "And even if people can't pay back the debt, Visa still makes money. It's a very attractive company."

    The IPO gives investors a chance to profit from the rise of electronic payments as more people eschew cash. The trend is expected to accelerate in the years ahead as an entire generation weaned online grow up to enter the job market and begin buying more merchandise and services on the Web, where electronic payments are standard.

    Visa already dwarfs its closest competitor, MasterCard Inc., whose stock has more than quintupled since that company went public less than two years ago.

    But analysts say Visa priced its IPO more aggressively than MasterCard, making it less likely that its stock will appreciate as dramatically in the months ahead.

    Visa processed 44 billion transactions totaling $3.2 trillion in 2006, according to the Nilson Report, an industry newsletter. MasterCard handled 23.4 billion transactions totaling $1.9 trillion in the same year.

    Hurt by legal expenses, Visa suffered an $861 million loss on revenue of $5.2 billion in its last fiscal year ended Sept. 30. Visa bounced back in its fiscal first quarter a $424 million profit, a 70 percent increase from the previous year.

    While pitching the IPO, Visa executives told investors to expect the company's earnings to rise by at least 20 percent during the next two years. To help achieve that goal, Visa plans to trim its annual expenses by about $300 million over the same period.

  3. S2007S


    this could easily open up above somewhere between 60-70 a share...

    only ones making money on this are the ones who have shares in their hands tonight below 40 that will be selling them for probably a 50-100% profit after they open this ipo....

    no need to fall for the hype on this one....
  4. noone knows when this will start trading? I thought the shares were assigned tonight, does that mean it will be traded in premarket tomorrow before the open as well?
  5. S2007S


    no premarket for V, should open between 10-11am
  6. I would not be surprised if some schmucks get filled at 100 a share at "market".
  7. Uninformed individuals on other message boards are throwing money at this IPO like it is a for sure run straight to $250.

    Going to watch them get slaughtered tomorrow. :D
  8. yeah, so no way if i put a limit order in for 46 at open i will get filled right?

    i guess i will wait till they first wave of selling come in, and buy that frst selloff.....bidu with better earnings....could daytrade up to 112 before settling the day at 88 or so, and then eventually come back to 56 where i will probably enter a long term position.
  9. Sheep rush to slaughter.

    I can't WAIT to view this from the sidelines, as a spectator sport.

    Visa floated 406 MILLION SHARES, and there's an additional 40 MILLION shares waiting in the wings for over-subscription.
  10. if V opens at $44 will trade at 7.6x sales. while mastercard, a company that has been public for 2 years trades at a 6.8 sales. MA is the smaller company (i think a little bigger then 1/2 of Visa)so MA probally more room for growth. How can you explain this opening up at 100 or even 80 trading at such a signifiant premium to MA? but you probally know this allready and are long a boatload of MA into the IPO?
    #10     Mar 18, 2008