Yesterday was the highly anticipated initial public offering (ipo) of Visa – stock symbol “V” (you know you are big when you get a single letter) which ended up being the biggest stock IPO in American history. The stock was sold to (already) rich insiders, ie brokers,executives and various other people much richer than I, at a price of $44 per share.
As is often the case with “hot stock ipos”, the price started trading much higher (around $65) than the initial offering price and ended up the day at $56.50. So the huge financial gap between those rich insiders and myself, is ever so slightly larger as I write this.
The success of the VISA ipo is all the more surprising considering the fact that not once did I use my VISA card yesterday, so I’m guessing someone else perhaps took up the slack? 🙂
Is VISA a good buy now?
Hmmmm…..I have no idea. As I mentioned a couple of days ago I think that the amount of hype around this stock makes it a long shot to make money from trading in VISA shares but what do I know?? Well, I do know that if it was a good buy at the ipo price $44 (which apparently it was), it’s a lot less of a good buy at $56 which is quite a bit higher.
Who made money on the VISA ipo?
Not me (thanks for asking), but judging from the fact that 177 million shares were traded today out of a total float of 406 million – I would guess that a lot of the fat cat insiders who were able to order some ipo shares made out like bandits. Too bad the VISA investment bankers were not inspired by the Google Dutch auction system.
From my extensive research it appears that the following institutions also made out like bandits in this deal:
- Bank of America (BAC) – $625 million.
- J.P. Morgan and Goldman Sachs – $500 million in fees.
- Citygroup Inc. – $300 million.
- Quest For Four Pillars Inc. -$0.00
The rich got richer, I’m still going to work tomorrow and VISA will probably do ok, but don’t expect the kind of returns that MasterCard has produced.