correct me if im wrong, but is this the first credit card company to go public?
rumor has it their seeking to pop at 10billion.
anyone else think this is gonna be a complete bust??? I feel that with consumer spending a bit rocky (even with the spend happy holidays coming up) so goes VISA...
just a thought.
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Mastercard is already public and Morgan Stanley is spinning off Discover. Amex is public, and has been for years.
Discover has already been spun-off
MC has done extremely well since its IPO
MC has been a monster. Visa could very well be too.
Ages ago. Not sure if they are present in America as well.
Are you serious??? What does consumer spending have to do with whether or not VISA's IPO is a complete bust? We are moving to a society where nobody uses paper currency any longer. Every time you swipe your VISA checkcard or credit card, they are getting paid.
Correct me if I am wrong, but don't credit card companies charge retailers a % of transaction value as opposed to a flat fee per transaction? Assuming this is the case, of course consumer spending has an impact on the credit card companies.
SMUguy, you're right... The question is, which will be more significant- a potential drop in consumer spending or an increase in usage of credit cards (VISA). As a young person, I know that I use a credit card for at least 95% of my purchases, even buying 1 coke at a gas station. A lot of my friends are the same way. I personally think that five years out, this will not be a bust. Short term, could go sour if consumer spending drops significantly.
I was under the assumption that they have to consolidate their overseas operations and their US operations together and get them all on one balance sheet before they can go public. Has this already happened?
Think I saw Visa's last year's operating income was $1.2 billion. A $10B market cap isn't unreasonable given MA trades at a EV/EBITDA of appr 20x.
The credit card business is a great business and an even better one if you are not assuming the credit risk associated with the cards. In the case of VISA and MC they just provide a network that the charges are made over while the banks that issue the cards are exposed to consumer credit issues. The CC companies just collect a "toll" for network access. Discover and AMEX are different - they operate their own networks and issue cards themselves.
A slow down in consumer spending could have an impact on the CC business but in today's environment I think it may actually benefit certain players. People who relied on taking equity out of their homes to finance their lifestyles no longer have this as a liquidity source. The next best option (for many of these people), assuming they don't curtail spending, is to spend using a CC and deal with paying the bills later. This will lead to further activity on credit cards, thus increasing the tolls collected by the VISA and MC , but again not exposing them to consumer credit risk.
Think of the CC business like a stock exchange. The exchange is just simply a middle man for a transaction but gets paid a fee for the trade taking place on it.
Well, American Express does both. It licenses out networks to other financial institutions for them to offer cards (Citi AmEx, jetBlue AmEx, etc) AND issues their own cards.
I'm bullish on Visa. Consumer spending may be down (but only down to pre-credit crunch projections), but the housing market's ills are a boon to credit card companies as consumers shift from home equity and mortgage debt to credit card debt. American consumers are highly efficient users of debt--this will never change--and credit cards are by far and away the most popular source of personal debt financing.
bigdayj, you are a fucking idiot if you don't think consumer spending has to do with VISA's performance. And I don't know WHY you're talking about cash vs credit cards; I think you're confused.
Visa is also perfectly hedged against inflation. They grow by 2.5-3% per year even if the business has zero economic growth (which is not the case).
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