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Visa is now master?

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March 15, 2008 – Comments (2)

I don't see why Visa's IPO is going to have such a huge impact on Mastercard's shares. Are there really people out there who think "I'm going to pay a $10 commission to sell MA so I can pay another $10 to buy V because I think Mastercard is going to get edged out of the credit card business by this strong new competitor"? Are there people who think that the IPO changes anything? Maybe Visa's IPO will cause people to rebalance the credit card payment systems segment of their portfolios.

If a rational investor owns MA, he's not going to sell it because of Visa's IPO. He might buy V with other money, and he might sell for another reason, but no decent investor, individual or institutional, will sell MA because of Visa's IPO. So what's the big deal? 

2 Comments – Post Your Own

#1) On March 15, 2008 at 7:41 PM, AnomaLee (28.55) wrote:

A big investor might cut some of their holding in MasterCard, or that a bunch of dumb idiot flock-traders will sell their holdings for MasterCard.

Neither is likely.. But, personally I am very excited for the Visa IPO. I miss IPO's and all the LBO and M&A activity, but I don't think Visa is better than MasterCard.

I read over MasterCard last quarter. They're great. Their financial business model is much better than 95% of any other financial stock you can find these days. They will probably get another run up in the next 3 years.

From what I've seen & heard from analysts is that MasterCard has more international exposure than Visa, so why would I sell MA to hold something that does more business in a declining market anyway? For these businesses the most growth will be overseas.

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#2) On March 15, 2008 at 9:30 PM, FleaBagger (27.35) wrote:

I thought Visa was everywhere you want to be.

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