V - Visa Inc

Probably a pretty good one to grab up on opening day. Excuse the noob question, but with a new IPO how are the 406 million shares sold? Is there one set price, like $42, and all of the shares are sold at that price? Do the MMs sell the shares and determine the price?

Awesome. I've never bought before when a company has just went public. I'll prob snatch some shares when it comes out.

what makes everyone think Visa will just go through the roof? With the entire economy biting the dirt and seeing bloody day after bloody day...I'd say wait. Let all the eager bunnies buy in...watch it dip..and then buy. I wouldn't be surprised if Mastercard holders begin to sell their positions to jump in V.

What is the companies reason for going public? It's been around since the 1950's (Concept that is) and done quite well as a privately owned business since it's establishment in 1970, it's not like they have come up with a new business model that I am aware of. While most IPO's do very little with regard to performance, more fundamentals would be necessary here if one was to play this as a buy/hold. However, most IPO's spike initially so it's worth watching for a DT which is what I will be doing. Thanks for the thread StockJocke...

Visa has been at the forefront of electronic payments since its inception. From the first revolving credit card platform to neural networks and mobile payments, Visa has pioneered the growth and development of this fast-moving industry. Visa’s payment platforms are increasingly the backbone of global commerce, enabling the swift and secure transfer of value and information among financial institutions, individuals, businesses and government entities.


1958 – Bank of America launches the BankAmericard in Fresno, Calif., with an innovative “revolving credit” feature.

1970 – Visa is incorporated in the state of Delaware in 1970 as National BankAmericard Inc. (NBI).

1973 – NBI launches the first electronic authorization system, followed a year later by an electronic clearing and settlement system, the precursor to VisaNet.

1974 – The International Bankcard Company (IBANCO) is formed to administer the BankAmericard program internationally.

1976 – BankAmericard changes its name to Visa – a simple, memorable name that is pronounced the same in every language, and adopts the blue-and-gold flag.

1983 – Building on its “any time, anywhere” promise, Visa launches a global ATM network, providing 24-hour cash access to cardholders around the world and contributing to the convenience of modern business and leisure travel.

1986 – Visa becomes the first payment card system to offer multiple-currency clearing and settlement, providing financial institutions with faster restitution methods and greatly increasing transaction efficiency.

1993 – Visa is the first to apply state-of-the-art neural network technologies to payments, potentially reducing the incidence of card fraud by giving Visa member banks smarter and timelier data about suspicious transactions. In the same year, Visa offers the first international prepaid card, Visa TravelMoney.

1995 – Visa co-develops industry-wide chip card specifications, Europay/MasterCard/Visa (EMV), to ensure that all chip cards will operate with all chip-reading terminals.

1997 – Visa’s annual global sales volume reaches US$1 trillion, a significant milestone for the payments industry.

1999 – Visa conducts the first euro transaction using a payment card.

2001 – Visa’s annual global sales volume reaches the US$2 trillion milestone.

2004 – Visa’s global debit volume surpasses credit.

2005 – Visa updates its brand identity with a new look to better reflect new payment opportunities, such as mobile and contactless.

2007 – Visa launches the Visa mobile platform, a business and technology framework for facilitating the adoption of mobile payments and value-added services.

2007 – Visa announces the completion of the company’s corporate restructuring, creating a new global corporation called Visa Inc.

In answer to pmc2a's question

Usually IPO’s Are brought to market by a single large brokerage firm. If they feel they can’t handle all the placement of the shares they will farm some out to other brokerages. Which is usually the case. So now you have 3 to 6 or more large brokerage firms that have a chunk of the shares. The brokers in these firms are each given a chunk to offer to their clients. They usually offer them to the clients that do the most trading with them or have large accounts. Sometimes they offer them to new contacts in order to entice them to become clients. In any case we, the “public”, are not in the loop.

The share cost to the clients offered shares, is just the IPO price. The broker makes a commission for placement of the shares paid by either the brokerage or the IPO as part of a contract deal. So those Clients get the IPO without paying a commission. But they pay the commission on the sell side. I have been able to get a few IPO’s in the past but we are talking 20 years ago.

The brokerage has to retain some shares to sell in the open market as most of the clients will not sell theirs till the price has soared. If the IPO is over priced the shares may gap down, but this rarely happens. Most often they gap up and in most cases by a large margin. We the “public” will have to pay up if we want any shares. Those shares most often sold at market open are those held by the brokerage through an MM in order to create a market that the rest of us can then buy into.

As the price goes up some of those original clients will sell into that open, making instant profit. Some will hold for future gains. In either case there are now enough shares available to create a “market” and you and I will pay dearly for those shares.

There is hope however.

If you are able to get the first shares offered the ‘public’ at open and the price continues to rise you can make a lot. Often the share will gap up and go higher for awhile till interest dries up and then they will settle down; this could be a good short play.

Once the shares have consolidated or are oversold you might get another bounce.

Do not expect to get any shares at the IPO price.

RobertT

A follow up to pcm2a.

If you want in on an IPO at the IPO price , you should contact the brokerage (s) that are handling the IPO. If you offer to set up an account with them you might find a broker willing to part with some shares in order to have you as a client. You could say you want in on the IPO and want a 1000 shares and you would be willing to open an account to get those IPO shares. Most likely you will find a broker willing to accommodate you.

I have not been able to get an IPO in so many years cause I started using discount brokers, which seldom if ever are offered shares for an IPO.

You will pay dearly for commissions with a full service broker, But there is no law that says you have to sell those shares through them. It will piss them off considerably but you can have the shares transferred to you and sell them through your regular broker. You avoid the commission on the buy side and have reduced commission on the sell. The transfer will take time so you will need to have the fortitude to hold for a while. Don’t expect to do business with the broker who sold you the shares ever again.

RobertT

Good info here thanks

Do yourself a favor and stay away from this Visa IPO for a bit.

The fact is that the underwriters are going to make a lot of money form the IPO premium. They will sell as many shares as they can to you, the retail guy, so let others take the beat and you can get in at a cheaper price. This has happened many times before. Just take a look at: NMX, VMW, BX, FIG, etc.

I have no doubt that Visa will post very good numbers in coming years, despite being in a turbulent credit system but getting in at the IPO debut price is just calling to get nailed.

Sure the price can go up but once people start to sell after they made that quick buck, it will be impossible for many to exit at a decent level. Your emotion will get the best of you and you will get nailed. It happened to me twice and I learned from it.

i agree with bigbull, trading a stock on the debut is gambling, bigbull gives good examples of IPO for other companies while MA did very well on it's debut

gambling

VMW IPO's at $29, and opened at $50, before going to $125. Not it is at $60. GOOG also took off. Same as MA. Getting in on these solid named IPO's can generally "not always" be good idea if you trade smart and take profits imo.

-Spec

How about watching it for the first hour or two and then trading in whatever direction it's going in?

Another thought. Visa will no doubt go up, just maybe not right away. You could always just stagger your buys as it goes down. Buy a couple thou to start, and add just little bit every couple of dollars it goes down.

However, as has been previously mentioned in an article, don't expect V to mimic MA. V is coming out of the gate at a much higher price that MA did and with a much higher PE. In fact, didn't they say that V is being priced at around the same valuation as MA is currently? I don't think this one will be a 5 bagger in two years.

V is coming out with 3x as many shares as MA.

MasterCard: Cramer on CNBC says that the Visa IPO is a great deal, and that selling MA would be a mistake

Visa may raise as much as $17 bln in initial sale - Bloomberg.com : Bloomberg.com reports that Visa may raise as much as $17 bln in what would be the biggest U.S. initial public stock offering. Visa, the world's largest payment-card network, plans to sell 406 mln Class A shares for $37 to $42 each, the San Francisco-based company said in a regulatory filing today. Banks have the option of selling an additional 40.6 mln shares, pushing the potential size of the deal to $18.8 bln. The company is trying to replicate the success of its smaller rival, MasterCard (MA), whose shares have surged more than fivefold since a May 2006 IPO. At the high end of the projected range, Visa's transaction would be the world's second-biggest IPO, after the $22 bln raised by Industrial & Commercial Bank of China Ltd. in 2006.

I agree with part of your statement, I just don't see V being the darling that everyone expects it to be. All of these hyped IPO's are hyped for a reason.

V has nearly 3X as many shares offered to the public on its debut, therefore making much more liquid but much more rigid in price. I doubt we'll see any big swings soon after the debut, specifically with a lot of selling and buying going at the same price and time.

It is being priced in a time when credit concerns are at a pinnacle and when delinquencies on credit card payments are also at an all tie high. This will obviously nag new costumers and will temper growth for the next year or so, leaving many anxious institutional investors on the sidelines before pulling the trigger.

This is how I read the situation.

the stock will tradable, but it wont see any large pools of capital injected into the company until fears evade.

i'm feeling that bigbull

Visa is a card processor, not a lender

They do not extend credit like COF and DFS

They are like MA (card issuers, not credit issuers)