iamned.com

Visa IPO a Huge Buy Inspite of Lousy Tape Action

I will admit that I went long on the Visa IPO. I sold my holdings of GOOG (at a loss) and EWZ (at a nice profit) this morning before the market open and went long on some VISA stock at $59.5/share. I only allocated 1/3 of my portfolio to VISA because I didn’t like the tape action in the first few minutes of trading. There was no strong rally or buying preasure, upon the opening. The stock apeared to have debuted somewhere around $65 and quickly sold off to $55, before rebounding to $59, thus validating my original suspision of poor tape activity. Fortunately, I didn’t go all in and I still have enough cash to buy more should it go lower.

Visa should be at $70 right now given all the hype surounding the IPO and Visa’s stellar fundamentals and growth prospects. BUT-I am still VERY bullish on the long term outlook of Visa, which is why I’m holding (even at a slight loss).

Visa has dominant marketshare-66% of creditcard market, surpasing Mastercard by a large margin. In addition, Visa has huge growth prospects in emerging markets such as China, Brazil, Russia, and India. Visa’s market cap is roughly $23 billion ($58.2 share X 400 milloion shares), which isn’t that excessive when you consider that VMware has a market cap of $16 billion or that GOOGLE is worth over $200 billion, yet when these companies went public they were only worth a couple billion. I woudn’t be surprised to see Visa having a $60 billion dollar market cap in the next year, as its earnings contonue to grow. The potential is absolutely huge.

The 1-day chart is very bullish with a short term target of $65

My target for Visa is $100 within the next few months, asuming the market doesn’t fall off a cliff. As I wrote many times on Iamned.com, we’re still in a bull market and a global economic boom as humanity transitions to a globalist, smartist type one civilization. We’re still in the ‘new era’ of spendism, consumerism, paymentism, and hyper capitalism. Visa stands to benefit directly from this transition.

As I continue to add to my Visa position I’ll update.