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The Visa Ipo

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So banks are dumping visa to shore up the balance sheets. This will be the biggest IPO in history.

Visa: Bailing Out The Banks

Visa plans to go publc this spring, and the prospectus filed today indicates that it will get $15.6 billion (after deducting about $481 million in underwriting fees) from the offering if it is sold at $39.50 a share, the mid-point of its offering range.

Of that money, how much do you think will stay in Visa to help the company grow?

In round numbers, zero.

This offering is evidently intended to serve two purposes. First, to bail out the banks that now own Visa from the financial responsibility of antitrust violations involved in Visa’s effort to keep its member banks from offering American Express or Discover cards. The first $3 billion raised goes into an escrow account to pay damages.

The second purpose is to get cash to banks that may need additional capital, which is to say a lot of banks. Essentially all the remaining cash from the offering will end up with the banks, from repurchasing stock from them. The banks can use the extra capital.

Whatever else this prospectus does, it lays out one of the most convoluted capital structures you will ever see. It has Class A shares — the ones the public is being asked to buy — Class B shares, which go to banks, and no fewer than four different kinds of Class C shares, which also go to banks.


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how ironic, the biggest ipo in history at the height of the credit bubble and it is.... a credit company!!!!

This is not just selling the family silver but selling the children too, these four by two's must be scint mate !! (Cockney for Jews) no offence I can assure you , otherwise you can stop calling me a sweaty sock (Jock)

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