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Mar-15-2008

Visa IPO on March 19

Visa is expected to initiate its public market activity on March 20th. The price offered will be between $37 and $42, but many think, based on MasterCard´s past IPO performance, that the opening price in the market will be much higher. According to some polls, the expected opening price will be between $50-$60 each stock. The demand for this record IPO, inicially 18 billion, has been more than doubled, suggesting
that many buyers will be unsatisfied and willing to buy Visa (V) in regular market hours, rising the price.
 



MasterCard (MA) did great on its IPO, and that performance is the key for Visa´s success. Below we can see MA evolution:

Mastercard IPO

Starting its IPO in $39, by the end of the first day its price was $46, a nice gain of 18%. Then, the price decreased, and 6 months later MA began to increase its value substantially, having a 525% gain in less that 2 years. 


Many analysts predict that MA´s incredible growth will artificially inflate the price of Visa’s stock. Personally, I believe that Visa is a strong buy that could easily double in 6 months, but I will be difficult for Visa to have MA´s performance.

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