Visa offering not seen as elixir for U.S. IPO market
Written on March 24, 2008
The blockbuster initial public offering of Visa Inc (V.N: Quote, Profile, Research) — the largest ever in the United States — will do little to revive the slowing IPO market, which has been dampened by investors spooked by the credit crisis.
With its $17.9 billion offering, the world’s largest credit-card network’s IPO is the first bright spot in the U.S. IPO sector this year, but that market is likely to return to gloomy skies in the coming months.
“Visa is in a league of its own,” Francis Gaskins, president of research firm IPOdesktop.com, said.
“For anyone else to make it in this market, you have to be profitable, you have to have a growth plan that doesn’t require accessing the debt markets and your proceeds should not be used to pay off debt,” Gaskins said.
“There are few, if any, companies like that in the pipeline.”
Visa raised $17.9 billion in an offering late Tuesday as investors seized on its growth potential and lack of direct exposure to the global credit crisis payday loans lenders. The San Francisco-based company sold 406 million shares for $44 each — above the forecast range of $37 to $42.
Except for Visa, none of the U.S. offerings have priced above their range so far this year, compared with 16 deals that priced above range in the same time period last year, according to data tracker Dealogic.
More than 60 IPOs were withdrawn or postponed in the past two months, with at least 30 of those in the United States alone.
Filed in: management.