Case Study Of IPO Process Of VISA Inc.
VISA Inc.
Visa Inc. is one of the most recognized global financial services brand and is considered to be world’s largest electronic payments network. Visa Inc. deals in payment cards, transaction processes services like authorization, clearing and settlement, payment product platforms. It also provides value added services like risk management, loyalty services, dispute management and information services. It also act as an enforcer of common set of rules to be followed for payment.
IPO Process of VISA Inc.
The salient features and steps involved in IPO of VISA Inc. are as discussed as follows.
i. Stake offered
As for the pathfinder prospectus, registered by SEC on February 25 2008, Visa offered in its IPO 406,000,000 shares of class …show more content…
Banks, not Visa, take on the risk that consumers (in a strong recession period) won’t pay their credit card debts. Again, Visa is immune from the downturn in consumer spending, because it reaps its profits on fees charged on each transaction, as opposed to the total amount people spend (and consumers in that period made more debt purchases using debit cards, easier to obtain, rather than credit cards, and that’s why transaction volume remained strong even as spending declined).
iii. Massive growth potential
Cash-based emerging economies were embracing new electronic forms of payment. Visa didn’t hold any consumer debt on its books, was in the top quality Tier and was the number one company in its industry.
iv. Mastercard IPO
The main competitor went public in 2006 at $39/share and traded in 2008 at $200 with a market cap of $27 billion. Visa raised $17 billion only in the IPO, and was and is healthier than Mastercard.
v. Behavior of the leading underwriters (JPMorgan and Goldman Sachs)
They selected the potential buyers to make sure that the shares were going into the hands of holders, rather than quick sellers, who looks to make fast money on the landmark deal. This was the main reason for the biggest IPOs’ flop in history, like the one of Blackstone Group: on its first trading day, 19 million shares were bought and then sold, with the largest stock flip in IPO
Visa Inc. is one of the most recognized global financial services brand and is considered to be world’s largest electronic payments network. Visa Inc. deals in payment cards, transaction processes services like authorization, clearing and settlement, payment product platforms. It also provides value added services like risk management, loyalty services, dispute management and information services. It also act as an enforcer of common set of rules to be followed for payment.
IPO Process of VISA Inc.
The salient features and steps involved in IPO of VISA Inc. are as discussed as follows.
i. Stake offered
As for the pathfinder prospectus, registered by SEC on February 25 2008, Visa offered in its IPO 406,000,000 shares of class …show more content…
Banks, not Visa, take on the risk that consumers (in a strong recession period) won’t pay their credit card debts. Again, Visa is immune from the downturn in consumer spending, because it reaps its profits on fees charged on each transaction, as opposed to the total amount people spend (and consumers in that period made more debt purchases using debit cards, easier to obtain, rather than credit cards, and that’s why transaction volume remained strong even as spending declined).
iii. Massive growth potential
Cash-based emerging economies were embracing new electronic forms of payment. Visa didn’t hold any consumer debt on its books, was in the top quality Tier and was the number one company in its industry.
iv. Mastercard IPO
The main competitor went public in 2006 at $39/share and traded in 2008 at $200 with a market cap of $27 billion. Visa raised $17 billion only in the IPO, and was and is healthier than Mastercard.
v. Behavior of the leading underwriters (JPMorgan and Goldman Sachs)
They selected the potential buyers to make sure that the shares were going into the hands of holders, rather than quick sellers, who looks to make fast money on the landmark deal. This was the main reason for the biggest IPOs’ flop in history, like the one of Blackstone Group: on its first trading day, 19 million shares were bought and then sold, with the largest stock flip in IPO