NEW YORK – MasterCard Inc., formerly MasterCard International, will probably make roughly $2.8 billion from an initial public offering of stock that is planned for later this year, analysts said on May 3 when the card brand filed details of its offering with the Securities and Exchange Commission.
The terms of the IPO indicate that, depending on how it works out, the financial institutions that currently own MasterCard will retain between a 41% and 44% stake in the company.
The company did not set a date for the offering, but did reveal that the proposed symbol for card brand would be MA. The company also said it would set aside a 10% stake in the offering to form a charity, the MasterCard Foundation.
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The company initially filed its IPO plan last September. In February, the company delayed the offering until the second quarter to allow its chief executive officer, Bob Selander, to recover from prostate cancer surgery.
Both Visa USA and MasterCard face ongoing legal battles over the interchange which retailers pay them to process credit and debit card transactions. The associations also have been sued by American Express and Discover Financial Services for alleged anticompetitive practices that blocked the associations' member banks from issuing cards on their rival networks.
MasterCard said it plans "to use all but $650 million of our net proceeds from this offering to redeem shares of Class B common stock from our existing stockholders." The balance will be used to increase capital for general business purposes, including legal costs.
On May 2, MasterCard reported that its first-quarter profit rose to $126.7 million, or $1.27 a share, from $93.3 million, or 93 cents a share, a year earlier.
The company said the revenue increase reflected higher usage on cards carrying its logo, a larger number of transactions processed and pricing changes that went into effect on April 1, 2005.
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