Visa IPO getting a bump higher

[eigh8or]

Visa's IPO Sparks a Running of the Bulls
3/7/2008 3:20 PM

The initial public offering (IPO) for Visa hasn't even hit the Street yet, and the stock has already received a price-target increase from Morningstar. Visa will hit the NYSE on March 17 with plans to offer 446 million shares at a price of $37 to $42 per share. Morningstar analysts have high hopes for the equity – after setting their price target at $65 per share a week ago, they bumped up the figure to $74 per share today. The firm stated that they upwardly revised their price target "after spending more time crunching the numbers."

Morningstar analysts aren't the only ones who are bullish on Visa. MSN Money recently ran a breathlessly excited article on the IPO. Michael Brush called the opportunity to own Visa shares "priceless" and noted that we could see "Visa shares advance 50% in a year or a little more."

Let's hope for Visa's sake that this borderline-giddy mood on the Street doesn't set the bar too high for the credit-card company. Blackstone Group (BX) enjoyed similarly high levels of enthusiasm ahead of its IPO last summer, and the stock has since plummeted steadily lower.

Any members thinking of trying for a few shares of V if they can get them under $50?

eigh8or

[eigh8or]

Visa raises about $17.86 billion in record IPO

By Wallace Witkowski
Last update: 6:09 p.m. EDT March 18, 2008Print RSS Disable Live Quotes

SAN FRANCISCO (MarketWatch) -- The initial public offering of credit card company Visa Inc. (V:V


V, , ) priced at $44 a share late Tuesday. The offering raised a record $17.86 billion with the issue of 406 million shares. The $44 a share price was above the expected range of $37 to $42 a share.

eigh8or note: It wouldn't surprise me to see V close above $50 on Wednesday.

eigh8or

[eigh8or]

Just a short time trading, but V already is showing signs of a potential flag. I like the lower volume as it builds a small base. Might explode up to the upside on the next strong market move. JMOP

eigh8or

[shane]

Hey,,, you know what I was thinking the other day? Anybody else find it just a little weird that a company who makes their money from credit aka. debt, is now becoming a public company, right at a time when many people may very soon not be able to pay these credit card payments?

A formerly private company that is in this business is unloading itself on the public market. I don't think this is a coincidence. That doesn't mean people can't trade very short term, but anyone who is thinking about holding this for an investment, there is better ideas.


Best,

Shane Hurren
Stock Scanner Stocks Screening Screener - SwingTracker.com

[hybridanime49]

do you think Visa will have any potential to hit 50 at least? in the near short term?

[talldog]

Visa makes all of it's money from transaction fees and carries no consumer debt, that goes to the banks that issue the card. In Asia and Eastern Europe they are beginning to shift from cash to cards, both credit and debit. Visa is well placed to succeed in those markets. One can hope that Visa, that does almost twice the business of Mastercard, will do as well. Mastercard went public at $39/shr in 2006 and on Friday was over $220! The P/E ratio based on available history and projections is something like 38 which is not good in terms of other available equities, however I still think it may turn out very well and I invested a chunk (at market price on issue day) and so far I've not been dissapointed. YMMV.

[eigh8or]

Hybridanime

It sure hope it drops back near $50 but I for one don't see that happening. Institutions and Funds are already loading up with shares, and I'm sure they plan on holding on for the longer run higher. Keep an eye on MA. If we were to see MA take a sharp drop lower, then V would most likely follow it lower. It would take some negative news or rumor to cause V to drop back near $50. JMOP

Thus far V appears to be moving in the same manner as MA did when it first went public.


MA opened between $42 and $47 and then traded sideways for about two months before it started its climb up to $100. V is already doing the sideways movement. If it were to drop back near $60 or just below, I would suggest you consider a small position. I expect there are plenty of buy limits waiting near $60 already.

eigh8or

[shane]

Hi Talldog,


Yes you are correct. I was aware that Visa makes their money from transaction fees. This wasn't what I was referring to, I was thinking about the fact that the age of consumerism is more then likely going to come to an end with rising of global inflation and massing debt. It is not just the US where inflation is high.


Still people will have to spend money. I guess what matters is how long or if people continue to use these cards for transactions and how much they still believe in the strength and security of banking and finance over the coming years. You are probably correct, I can still see people using these because of their convenience.

As for investing, I think it's good to look at the so-called mega trends or overall picture that may end up being major precursors that possibly influence a certain market and time. But I certainly don't have all the answers. This thing could shoot up to the moon.

Just something for people to think about

Best,

Shane Hurren
Stock Scanner Stocks Screening Screener - SwingTracker.com

[talldog]

Hi Shane,

One thing I think that is driving more use of Visa is their new technology, which is basically a keychain fob that you wave in front of a machine, you don't have to enter a pin and there is no signature required for most purchases under $25, so it would seem they are making it easier to use than cash at many outlets, Starbucks, etc. Christ, my keychain could get very heavy, I already have my gym pass, library card and supermarket discount on there, perhaps I'll need a purse to carry the key chain ;-P

Cheers, Ken

[eigh8or]

First let me say I did buy 20 shares of V @ $63 a few days ago. I figured that if it did drop back to $55 range, I'd be adding a few more shares. Consider that a $5 dollar drop would only put me back a hundred bucks, It seemed like a good move as I do expect V to move higher in the coming months. There still could be that move back down to $55, but its looking more like V is starting to edge higher. Todays close @ $65.50 came following a brief pullback, and as I expected $60 has held as strong support at least thus far. A move above $67.70 could easily find V pushing $70 quickly.

Anyone waiting for a big move lower now, might consider a small buy on any short pullback, as it looks as if V wants to start moving higher. JMOP

eigh8or