It's going to be a historic week. First, we experienced the meltdown of a mega financial institution, Bear Stearns & Cos. (NYSE: BSC). Second, Visa was able to raise a stunning $17.9 billion for its IPO with the share price coming to $44, above the $37-42 range.True, it helped that the Fed came to the rescue (with creative approaches to apply liquidity) and that the Dow surged 420 points Tuesday, the day of the IPO. There were also earnings optimism from Goldman Sachs (NYSE: GS) and Lehman Brothers (NYSE: LEH).
Even without these, though, Visa would have performed well. Simply put, it's a tremendous company.
It operates the world's largest payments processing system – leading in terms of transaction volume, payment volume and cards issued.
The crown jewel is VisaNet, which is an extensive technology platform. In fact, it can handle two times its current volume and is highly secure (there hasn't been a breach in over ten years).
What's more, VisaNet has proven to be quite flexible. After all, it allowed for Visa to move into the lucrative debit card market.
Visa is also looking at other growth markets, such as mobile, money transfers and prepaid cards.
It also helps that Visa has a "fortress balance sheet" and no exposure to credit card debt. Then again, the firm will need the heft to deal with some big-time contingent legal liabilities. But such things are for the future.
As for now, it looks like Visa is going to be a marquee deal. And in light of all the turbulence lately, it's something Wall Street really needs.
Tom Taulli is the author of various books, including The Complete M&A Handbook
Comfort Zone Investing: Survival of the fittest -- letting some banks fail
Three All-American stocks for portfolio fireworks
Michael Jackson fireworks, the workaholic
Reader Comments (Page 1 of 1)
4-30-2008 @ 3:09PM
RICH BRULATO said...
When their payment system goes mobile this stock will explode!!!!!!!!!!