Can Visa’s IPO Help Lift Its Partner Banks Out of the Economic Doldrums?
(NewsVisual, powered by IntellectSpace) -- Like the prettiest debutant at the biggest spring ball, Visa Inc (NYSE: V) launched its Initial Public Offering (IPO) on Wednesday to a gaggle of swooning investors.
“The company sold 406 million shares at a price above its expected $37 to $42 range, raising a total of $17.86 billion. That makes it the largest U.S. IPO ever, topping a $10.6 billion offering from AT&T Wireless in 2000,” reported The Wall Street Journal in an online article.
Analysts are expecting that the credit card giant will generate nearly $19 billion for the approximately 447 million shares of its Class-A common stock. In an economy that is threatened by rising consumer debt and spending, the Visa IPO is ironically the deal that is giving banks and investors some hope of a turnaround.
Since its rival MasterCard Inc (NYSE: MA) went through an IPO of its own two years ago, raising $2.4 billion, investors have been impatient for Visa to make a similar move. Those with much to gain from the deal include the big investment banks that have been feeling the squeeze thanks to the ongoing credit crisis, a crisis that just claimed the venerable investment-banking firm The Bear Stearns Companies Inc (NYSE:BSC) as its most prominent victim.
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