IPO’s are noteworthy for a lot of reasons. For many companies, it represents an important milestone in their growth. For investors, it presents an opportunity to start investing in a company that is new to the market. And of course for the media, it’s a huge event to talk about. So let’s start with the basic information you need to know about the IPO process, and what you need to prepare.
What is an IPO?
An Initial Public Offering (IPO) is the first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded. The money paid by investors for the newly-issued shares goes directly to the company, which allows it to tap into a wide pool of investors with large volumes of capital to invest in future growth.
How Do I Participate?
For individual investors, there are two ways to participate in a company’s IPO. Typically, the company going public will sell its shares to a number of underwriters, which tend to be large investment banks like Goldman Sachs, Merrill Lynch, or Morgan Stanley. Generally, these firms then make an initial allocation available to its larger institutional investors, along with a smaller allocation for individual retail investors. On the first day of trading, all the shares granted through the allocation process are available to be bought and sold – by everyone – on the open market.
How Do I Learn More?
Needless to say, IPO’s can be a risky investment. For individual investors, it’s tough to predict what the stock will do on its first few days of trading. This is partly because its historical data is not publicly available, making it difficult to analyze the company. And since many companies have IPO’s during a period of transition, the uncertainty of future value increases, adding even more risk. Here are some more resources to help you out:
VISA: ONE OF THE MOST ANTICIPATED IPO'S OF 2008
$18.8 billion dollars is a lot of money – in fact, no company in US history has raised that much money through an IPO. But that’s exactly what Visa plans to do with its upcoming IPO in late March. Visa plans to offer 406 million shares at a price of $37 to $42 apiece – and if there’s enough demand, underwriters can buy an extra 40.6 million shares. If the Visa IPO proceeds as planned, it will surpass the two largest IPO’s in history: AT&T Wireless’ $10.6 Billion in 2000, and Kraft Foods’ $8.7 Billion in 2001.
Visa is considered the world’s largest retail electronic payments network with over 1.5 billion cards issued. Like rival MasterCard, Visa is a credit card processor that makes money through processing fees on credit card transactions. Rather than lending money to consumers, it simply imposes a transaction costs both to the banks that issue the cards and the merchants that accept them.
Other credit card issuers have had IPO’s over the past several years, with various successes. MasterCard Inc. went public two years ago, and the value of its shares has risen nearly fivefold since. Discover Financial Services LLC, on the other hand, has seen poor performance since its IPO last July.
Post-IPO Update:
ZeccoShare members heavily traded V shares on the first day of trading, with over 162 buy orders and 12 sell orders shared in the community. And V now ranks as one of the top-held securities in the community.
WHAT DO THE EXPERTS THINK?
IPO takes VisaBlogging Stocks
Visa was able to raise a stunning $17.9 billion for its IPO with the share price coming to $44, above the $37-42 range.
Visa IPO: Large and in ChargeAnn Sosnowski, Seeking Alpha Visa Inc. is about to have what could be the biggest IPO in American history, planning to raise $19 billion.Instead of being a credit lender, Visa is a credit-card processor.
The Biggest IPO in US HistoryIan Cooper, Seeking Alpha Two years after the MasterCard (MA) IPO went public, shares catapulted from $43 to more than $200. But with greater market share than MasterCard, Visa (V) and its coming record-breaking IPO may be too good to pass up.
Game Plan: Buy Visa IPOJim Cramer’s Mad Money Because the IPO market has been so shoddy lately, brokers across the country are desperate to give their clients a win and they think Visa will be it.
Visa Prices Record IPOBriefing.com Credit card giant Visa (V) priced its IPO at $44, above the expected range of $37-42. Visa, the world's largest credit card network, sold 406 million class A shares
The Visa IPOSun’s Financial DiaryIn case you didn’t hear the news, Visa Inc., the largest credit card network, is preparing to go public next month under symbol V. According to terms filed with SEC...
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FROM THE FORUMS
How Do I Get In On The Visa IPO?I see lots of folks weighing the option. I need to know HOW to go about getting in on the Visa IPO. Does anyone here know how? Is there a place I can go to find out how?
Who's Gonna Buy Visa?Is anyone out there planning on buying Visa when it goes public the
week of 3/17/2008? I'm thinking of getting in early and hopefully
seeing a nice return. Why do others think this is or is not a good
investment?
Visa IPO Date InFrom what I heard (contrary to what I thought that they would delay it more) - Etrade is posting that Visa IPO is 19th and tradable date is 20th. On zecco I am guessing we can get in when it is tradable on the 20th?
IPO Research Group – VISA IPOVISA IPO week of March 17. What are you guys thinking about it?
Visa IPO Likely To Be Stalled Because of Economy FearsThis makes sense somewhat, but it really sucks. I have been waiting and waiting and waiting since October for the "V" to debut. This is a really great company, and will only grow faster each year. Plastic is where it’s at.fixe
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