After the IPO of Visa (NYSE:V) on March 18th there has been an incredible increase in stock price at the potential gain of an already profitable company of nearly 10 dollars.
China seems to believe in Visa, buying nearly $300 million dollars worth of the debit & credit card company, the Country's largest life insurance company is betting on the long term stability of America's power to spend. The large life insurance company, based in China, decided to buy the IPO in a recent surge of foreign investment that Chinese companies are undertaking.
It seems that the wise investment bankers injected the IPO, Visa, at just the right time. With the precedent of 350% change over time of the MasterCard brand in a bull market the Visa sale, which netted $18 Billion dollars for the leading card service, could do even better being inserted in a possible upswing in our GOLDILOCKS economy.
Potential pitfalls for the economy can only be fully realized in a huge downturn in consumer spending and credit. The credit component seems to be a null point because the credit crisis we are in seems to be only affecting the big purchases like housing and car buying but will not hugely bleed into buying a shirt from Abercrombie or jewelry from Tiffany & Co., who posted great earnings and is up as much as $5.00 today.
The debit side of the business also seems to be strong as a growing number of people are rejecting the green that they used to carry and going with Visa and banking backed plastic for transactions.
Look for Visa to continue to rise and be everywhere you want it to be!
(disclaimer: author has a long position or positions of Visa traded under class a NYSE:V)
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2 comments:
Good work.
I will have to say that much of this is over my head, but you definitely know what you're talking about. I am one of those that debits everything, so I am very greatful to Visa for that.
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