Boring Market

Visa is the market leader and is ripe with cash, but is this “over subscribed” IPO over priced and over hyped? This reminds me of the last hyped up IPO of The Blackstone Group when on the day of the public offering it peaked at its 52 week high and since then fallen over 56% in price.

Is Visa going public really a ‘gift from wall street’ or it just hype? I say mostly hype. Visa is not going to be a bargain anytime soon, whenever a large private company goes public it get massively overvalued on the open market. Does anyone know the true financials of this company? Does it have any true growth potential? Even with the business model being unaffected by the slowing economy and providing a service that almost everyone uses is this company solid? I think the majority of individuals assume since Visa has almost twice the market share of MasterCard and seeing how well the price of MasterCard stock is doing they automatically assume that Visa is a winner.

I would consider myself a conservative and I’m hoping to see the shares dip in the coming weeks first, before I make any decisions of jumping in. I lean towards being cautious while warning that even if this IPO seems ‘alluring’ you can easily lose your shirt trying to get a piece of the action. Listening to investment pundits should not influence your investment strategy; investigate further before you decide if this is a company you want to stick with for the long term. Jim Cramer says it’s an “instant opportunity”, while I’m saying its will be instantly overvalued.

Tags: hype·IPO·Visa