The much awaited VISA IPO gets out the door tomorrow according to Bloomberg.
Tradition suggests that the equity markets will be calmed with oily trades on troubled financial waters until the players can get it out the door. There might be a respite for stocks. It might not last. Federal Reserve meets tomorrow. They will be sure to do their part.
When the commentators and wide-eyed financial groupies wax poetic about the Fed's heroic actions in 'saving the markets' today, we might wish to keep in mind that in true Wall Street tradition they might just be angling for another quick customer face-ripping before heading out of the exits.
Bank owners counting on big payday from Visa IPO
Sun Mar 16, 2008 11:41am EDT
By Lilla Zuill
NEW YORK, March 16 (Reuters) - Turmoil has chilled the U.S. market for initial public offerings but it is unlikely to stop Visa Inc's attempt to burn its name into the IPO record books when it comes to market this week.
U.S. stock markets nose-dived on Friday with the S&P 500 index .SPX losing more than 2 percent, dragged down by a sudden cash crunch at Bear Stearns Cos (BSC.N: Quote, Profile, Research) that forced the Federal Reserve to intercede.
Against that backdrop, Visa is steaming ahead to list its shares on the New York Stock Exchange under the symbol "V". The listing is expected on Wednesday.
Visa's banking owners -- who stand to reap in the region of $10.2 billion in the offering -- may be pushing for the IPO's launch, analysts said.
"It is all the more critical that this happens now," said Francis Gaskins, president of research firm IPOdesktop.com.
Under Visa's plans, 406 million class A common shares will be sold to the public for between $37 and $42 apiece, raising between $15 billion and $17 billion, or more if demand is there.
It is seen as largest-ever U.S. IPO, and second worldwide to Industrial & Commercial Bank of China Ltd (601398.SS: Quote, Profile, Research), which raised $22 billion in 2006, according to Reuters Data.
Hopes are high for Visa's IPO with it following a more than fourfold jump in shares for smaller rival MasterCard Inc's (MA) 2006 IPO, which raised $2.4 billion.
"(Plans for Visa's deal) started long before anyone heard the words 'subprime crisis' but now all those banks could use a big payday," said David Robertson, publisher of the Nilson Report, a semimonthly credit-card industry trade journal.
The rich payday from Visa's IPO could prove timely for bank owners, with mounting credit losses plaguing many lenders. JP Morgan Chase & Co, which has not been as badly hit by the credit crisis as some Wall Street peers stands to be $1 billion richer from the IPO.
A BLESSING?
The offering could prove a blessing for Bank of America Corp, which could see proceeds of up to $600 million, and up to $260 million for Citigroup, both of which have recorded large write-downs as a result of the subprime mortgage and credit crisis. (Oh yes, we are truly blessed this Holy Week, aren't we? May God be merciful. - Jesse)
Underwriters, led by JP Morgan and Goldman Sachs also could gain hefty fees from the deal, which could help make up for a 55 percent drop in IPO activity versus the same time last year, according to Renaissance Capital's IPOhome.com.
The Visa deal is expected to generate fees of $500 million, or more if well received.
"Unless there is bank failure after bank failure in the next few days I would expect Visa to come," said Scott Sweet, managing director of IPOboutique.com....
