The only thing that really stands in the way of Visa's IPO (initial public offering) is the shopping that it now has to do for an investment bank to make this deal happen sometime early next year. The SEC (securities exchange commission; www.sec.gov) gave Visa the "go ahead" on an IPO in September of 2007. The only bad variable could be a bearish (bad outlook) market of early 2008.
MasterCard (NYSE:MA) went public about 2 years ago. The original offering was about $44.20. They are now, two years later, trading at right under $200 per share. Besides the obvious return that an investor could have possibly netted from this short term hold, MasterCard has held double digit dividends every quarter.
There are several things that could make Visa an even more appealing buy when it is introduced.
- Visa is the number one card in people's wallets. Visa is held by 60 percent of the card holding market.
- Outside of the obvious credit business that Visa holds, Visa is also the primary go between on debit cards. So we may even see an upside for banks like Bank of America (BAC), Wells Fargo (WFC) and JPMorgan (JPM).
No matter what your stance is on consumer credit, Visa is poised for great success in this coming year. The debit vs. credit exposure that Visa has plays on the growing trend to go totally plastic totally leaving out cash. While people may be bearish on consumer spending, I hope that you can sort through the financial tabloids and financial crap and see the future for Visa.
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