Visa Ipo Advanced Managerial Financ

Visa, Inc. IPO

Roxanne Bryan

FIN 516

Advanced Managerial Finance

Keller Graduate School of Management

Professor Warren Frey

January, 2016

Introduction

Boasting the fifth largest IPO globally, and the largest of any United States based company, Visa, Inc. has the world’s largest consumer credit card system in the payment technology industry (Holmes, 2015). Prior to Visa, Inc.’s successful launch, AT&T wireless held the record for the most successful launch at $10.6 billion. Privately held companies generally decide to go public to raise capital. The capital is commonly used to invest in new projects, purchase assets, improve the business, or yield a dividend for shareholders. In its IPO on March 18, 2008, Visa, Inc. (NYSE: V) offered shares at $44 per share, which was above the underwriters suggested range of $37 - $42 (Shwiff, 2008). The company raised capital worth $17.9 billion and would have raised more if they opted to float their shares.

Company’s Identity

In 1958, Bank of America, partnered with the then Visa, and launched the first ever consumer credit card program. The program was tailored for middle class families and small businesses. They expanded their credit card model internationally in 1974, and implemented their debit card model in 1975. Until 2007, Visa operated each business sector, owned by over 20,000 financial institutions, separately. When the company decided to do an IPO, they had to create a solid company. This created the birth of Visa Inc., “which was incorporated as a Delaware stock corporation in May 2007” (Visa Inc., 2008). Visa’s sector included Visa U.S.A., Visa International (included Asia Pacific; Latin America and the Caribbean; Central and Eastern Europe, Middle East and Africa), Visa Canada, Visa Europe and Inovant.” Upon reorganizing, all sectors except Visa Europe became subsidiaries of Visa, Inc., though they are still connected.

Visa, Inc. operates in over 200 countries, with over 9,500 employees, and has the...