IPO of Visa. Opinions?

T

trendlover

Curious what others think about this future public offering. Considering mastercard went up 300% after its IPO in 2006. Financials are so risky right now, but this could be a good long term bet..long term meaning 2 or more years. Any opinions?

Also consider some fundamentals for what its worth.. VISA has biggest share of the market at this time compared to AMX, M-Card, and Discover. VISA also becoming big in overseas emerging markets. Good solid company.
 
Quote from trendlover:

Curious what others think about this future public offering. Considering mastercard went up 300% after its IPO in 2006. Financials are so risky right now, but this could be a good long term bet..long term meaning 2 or more years. Any opinions?

Also consider some fundamentals for what its worth.. VISA has biggest share of the market at this time compared to AMX, M-Card, and Discover. VISA also becoming big in overseas emerging markets. Good solid company.
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With the way the credit shit is going on right now, I wouldn't want anything to do with it. Seems like Visa just wants to cash out and hand someone else the bag here.

Even if they don't have exposure (ie they only make money on transaction fees) I still don't like them because once everyone defaults and credit continues to get tighter, then transaction fees will be in less abundance too.

So either way, I am not buying anything those assholes are selling. Looks more like a trap to me than anything.

Why would Visa wait until this huge credit meltdown to go public? It's too obvious, doesn't make sense to me. Only thing I can think of is they want to transfer risk so when the credit market really shits the bed, they have already cashed out and the shareholders can deal with it..
 
Thanks for reply Reaver. Yes, I have had the same skepticism as you about credit crisis and why would VISA do this now. There is the possibility that it will just raise cash for VISA to cover losses (how big or small??) in credit default, and be a loser for the shareholders. But I can't help think that VISA is expanding rapidly in emerging markets. That is new customers (and those new customers will be under stricter guidelines for approval/creditworthyness. Its a new ballgame now that everyones sees the mistakes of their ways by liars loans and easy credit. So I think it may be good...but no, not as good as the 300% return on IPO mastercard so far. Just playing with the idea.
 
Quote from BlueStreek:

what`s the date for the ipo in regards to trading on the exchanges?
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I have read VISA will go public this month. Also it is the biggest IPO in the history of all IPO. Some say th PO will help infuse cash to other big banks too, and good for lending as a whole. I have never bought an IPO, so I am limited by my expierence.
 
They didn't exactly wait until the credit meltdown to go public, these things take years of planning. It just so happens that the environment is pretty poor for them right now.

Anyway, I wouldn't expect similar returns as the MA IPO no matter what the current market was like. In hindsight, the MA underwriters obviously underpriced it, and the Visa underwriters will no doubt learn from that and price it accordingly (higher valuation). They try and find a balance between raising as much money for the company as they can, while still providing a positive return for the shareholders. In the case of MA, the investors got too much of the return, where more of it could've/should've gone to the company. Just my $.02...
 
Quote from Moneyball:

They didn't exactly wait until the credit meltdown to go public, these things take years of planning. It just so happens that the environment is pretty poor for them right now.
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I see what you mean. So more like bad luck or bad timing in a way?
 
No, no expectations of the kind of return mastercard got. But I do think the potential for a nice profit will be there. Good feedback Moneyball. Have to do some more homework on this one.
 
Quote from Reaver:

I see what you mean. So more like bad luck or bad timing in a way?
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IMO, yes. MasterCard went public almost 2 years ago (again, they started planning for it years before that), well before this credit crisis, so they obviously didn't just want to cash out or put it off on the shareholders. FYI, the largest shareholders will be the company itself and it's member banks, so if the stock price takes a hit, they'll take a big one as well.

Companies go public primarily to raise money, and transferring some of the risk/reward is a side-effect of that, but not the main reason they do it IMO.
 
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