NEW YORK -- Credit unions issuing Visa cards moved one step closer to getting a share of stock in Visa Inc. on March 18, when the card brand recorded a very successful initial public offering of its stock.
The card brand broke its own expectations by selling 406 million shares at $44 per share, raising $18 billion. The company had previously estimated the share price at $39-$42 per share.
The triumphant offering is the first step in complicated process through which the card brand will both settle previous legal claims from other card brands like American Express, other legal expenses and, finally, channel some form of its stock into the hands of the financial institutions, including credit unions, which have issued the cards over the years.
Ironically, Visa market watchers have observed in media reports that Visa owes some of the success of its IPO to rival MasterCard. The number two card brand's IPO in May of 2006 both helped educate investors about the strengths of the card transaction processing business (versus card issuing) and gave them reasons to anticipate the Visa offering. Since it opened at $39, Mastercard has climbed as high as $227 per share before falling back to $210.
--dmorrison@cutimes.com
