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Table of Contents

Lead Story

Payments technology twists, turns, surprises

News

Industry Update

Fed puts payments in crosshairs

SEAA's welcome return to New Orleans

It's curtains for AmEx key fobs

Visa IPO largest in U.S. history

Interchange fuels ACH interest

Features

GS Advisory Board:
Payments experts weigh in on Visa's IPO - Part II

Advanced functions and the future

Tracy Kitten
ATMmarketplace.com

Views

Tick tock: Time to comply with PCI

Biff Matthews
CardWare International

Education

Street SmartsSM:
A passion to share

Jason Felts
Advanced Merchant Services

SAQ sun sets on smaller merchants

Michael Petitti
Trustwave

Make a plan to avoid failure

Jeff Fortney
Clearant LLC

Pinpointing compliance issues

David Mertz
Compliance Security Partners LLC

The pinch of PIN debit

Ken Musante
Humboldt Merchant Services

Search for talent made easier

Curt Hensley
CSH Consulting Inc.

Company Profile

Greystone Business Resources Corp.

New Products

Online friend in fraud fight

CompliancePal
Company: Compliance Coach Inc.

Customer care for the little guys

StreetSmart
InfoStreet Inc.

Inspiration

Destination: Sanity

Miscellaneous

POScript

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

April 14, 2008  •  Issue 08:04:01

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Visa IPO largest in U.S. history

Underwriters pulled off the biggest stock sale in U.S. history as Visa Inc. debuted March 19, 2008, on the New York Stock Exchange - stock symbol V - at $59.50, up 35 percent from its initial public offering (IPO) price of the previous day, as investors bet on an accelerating shift to electronic payments.

The IPO priced on Tues., March 18, for a record-breaking $17.9 billion as the San Francisco-based card Association sold 406 million shares at $44 per share. Visa gave underwriters a 30-day option to buy an additional 40.6 million shares.

Many analysts have high hopes and believe Visa's success on Wall Street could breathe new life into a stagnant IPO market.

The deal could also produce a windfall for cash-strapped banks battered by troubled portfolios of mortgage-backed securities and the credit crunch. About $10.2 billion of proceeds would go to large Visa stockholders, which include JPMorgan Chase & Co., National City Corp., Bank of America Corp. and Citigroup Inc.

Some analysts, however, are skeptical about the timing of Visa's offering directly on the heels of JPMorgan Chase's buyout of global investment banking, securities trading and brokerage firm Bear Sterns Cos. Inc. It was priced at approximately $2 per share on March 16, 2008.

Furthermore, 2007 marked the highest level of defaults on subprime mortgages in 10 years and a $33 billion pileup of unsold bonds and loans for financial institutions.

They argue that Visa is also losing billions from the outset of the IPO to pay off the out of court settlements for antitrust litigation between Visa and other credit card issuers.

Visa Chairman and Chief Executive Officer Joseph W. Saunders, in a statement released March 19, was more optimistic. "This is an exciting and historic day for Visa," he said. "It marks the culmination of a more than two-year process that led to our global reorganization and our becoming a public company.

"We believe Visa's new structure positions us to meet the changing needs of our merchant and financial institution clients around the world as we seek to enhance and grow the products and services we provide to our customers," he added.

On March 20, Visa's IPO underwriters exercised their over-allotment option to purchase the additional 40.6 million shares of Visa's Class A common stock at $44 per share, adding almost $2 billion extra in the company's coffers. After deducting underwriting discounts, commissions and estimated offering expenses, Visa expects net proceeds from the IPO to reach almost $19.1 billion. Visa's shares rose $7.74, up 13.7 percent from the previous day, and closed at $64.24 per share, with 49.55 million additional shares sold by day's end.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | USAePay | Super G Capital LLC | Humboldt Merchant Services | Impact Paysystems | Electronic Merchant Systems