Thoughts on VISA IPO?
I've been watching this a few monthes now, looks like it's finally going to happen end of March and will be the biggest IPO ever coming in at $18.7 billion.
Anyone else excited as I am? I've put some money aside with the unrealistic hopes of being able to pick up some shares but don't have a relationship established with anyone so I'm pretty sure I'm SOL. I don't see there being alot of retail allocations
Anyone else with more experience have any thoughts or advice?
By Steve Gelsi
Feb 25, 2008 12:07:00 (ET)
NEW YORK (MarketWatch) -- Visa Inc. has set its sights on generating the largest proceeds ever raised in a U.S. initial public offering, proposing Monday a whopping $18.8 billion deal that will likely begin trading on the New York Stock Exchange within the next several weeks.
The San Francisco card giant plans to offer 446.6 million Class A common shares, including 40.6 million shares for underwriters in a traditional "green shoe" portion of the deal.
At the top of the proposed pricing range of $37 to $42 a share, Visa's IPO would raise some $18.76 billion, easily eclipsing the $10.6 billion raised by AT&T Wireless in 2000 in what is currently the richest-ever U.S. IPO.
Globally, China's Industrial & Commercial Bank of China raised $19 billion in late 2006, which was the richest ever in the world at the time. Visa would have to price above its range to surpass that deal.
Visa plans to trade on the NYSE under the symbol V, according to a Securities and Exchange Commission filing made early Monday.
Visa's total market capitalization will weigh in at $38 billion with a total of 967 million shares outstanding.
Details of the IPO appeared to stoke bullish sentiment to start the trading week, as Visa stakes its future as a public company despite turmoil in the financial sector and bearish conditions in the stock market this year.
It's also debuting on the heels of big gains by MasterCard Inc. (MA, Trade ), which has doubled to $200 from $100 in the past year.
"This is going to be a superb deal," said analyst Scott Sweet of IPO Boutique. "I expect an avalanche of interest."
He cited Visa's long track record, its new management team brought in last spring and moves to settle about $3 billion in litigation with American Express (AXP, Trade ) and Discover (DFS, Trade ).
"I love the symbol, 'V' for victory," said John Fitzgibbon of IPOScoop.com, who pointed out that a whopping 15 investment banks will be involved in distributing the deal including J.P. Morgan (JPM, Trade ) and Goldman Sachs (GS, Trade ). "It's like a Cecil B. DeMille production."
Both Fitzgibbon and Sweet said the IPO is expected to begin trading by the end of March, in time for a usual springtime surge in the new issues market.
For 2007, Visa reported an adjusted loss of $861 million on operating revenue of $5.2 billion. For the seasonally important three months ended Dec. 31, Visa's net income amounted to $424 million on revenue of $1.5 billion.
In terms of the largest IPOs to date, AT&T Wireless in the No. 1 slot is followed by $8.7 billion for the 2001 IPO by Kraft Foods (KFT, Trade ), $5.5 billion for United Parcel Service (UPS, Trade ) in 1999, $4.6 billion for CIT Group (CIT, Trade ) in 2002 and $4.4 billion for Conoco in 1998.
Blackstone Group raised $4.1 billion last year, the richest IPO since the $2.8 billion offering launched by Genworth Financial (GNW, Trade ) in 2004.
While mega-sized deals have been relatively rare in the U.S., other countries have seen major IPOs.
Petro China (PTR, Trade ), for one, raised $9 billion in its stock-market debut last year as it eclipsed Exxon Mobil (XOM, Trade ) in market cap.
IPO watchers emphasized that the strong performance of smaller rival MasterCard will help boost the plight of Visa.
so this means, that a regular joe like me with minimal funds, can make a good amount of money off this great oppurtunity?
Last edited by JITB; 03-01-2008 at 12:31 PM.
Depends on your definition of minimal funds and good amount of money. Over the course of like 10+ years getting into the Visa IPO could be very, very lucrative. Though of course there will be a chance of a pretty good return in the short term, though definitely not as high as a longer term investment.Originally Posted by JITB
For cases like this I'd say the minimum buy amount should be at least $1,000 worth of shares if not more.
The way I understand it, and I could be totally wrong, is you could get some shares allocated if you are already doing significant business with any of the firms that are underwriting it. And retail allocations will be slim to none.
just got to put enough in for it to be worth it.
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