VISA’s Black Swan

[Hal4511]

There is an unexpected market event called a Black Swan. This term in finance was discovered by Nassim Taleb, a real hedge fund strategist, who also happens to have a Ph.D. and is a graduate from the Wharton School of Business.

“Taleb's Black Swan has a central and unique attribute: the high impact. His claim is that almost all consequential events in history come from the unexpected—while humans convince themselves that these events are explainable in hindsight.” (Wikipedia)

“A black swan is an outlier, an event that lies beyond the realm of normal expectations. Most people expect all swans to be white because that's what their experience tells them; a black swan is by definition a surprise. Nevertheless, people tend to concoct explanations for them after the fact, which makes them appear more predictable, and less random, than they are. Our minds are designed to retain, for efficient storage, past information that fits into a compressed narrative. This distortion, called the hindsight bias, prevents us from adequately learning from the past.” - LEARNING TO EXPECT THE UNEXPECTED By Nassim Taleb

The Visa IPO has the potential to be such a swan. It’s an instant ~$20bil new cash infusion into the market place. This isn’t watered down Fed bailout money. This is the real deal, the largest IPO in history from the largest transaction processor on the planet.

'We have an IPO market anomaly with Visa,' said David Menlow, president of IPOfinancial.com. 'This is a singular seismic event that is not going to re-ignite the market as far as instill confidence or bring more deals into the system.' (CNN)

Visa has twice the transactions of Mastercard—TWICE. It’s the world’s largest payment network with the largest brand. The stock will be paying a 4% dividend to boot. If you’re not familiar look at the one year chart on MA. It’s one of those bottom left corner to top right corner ones.

Guess who their #1 customer is--JPMorgan Chase. Good luck being net short when this hits the street. By the way, the IPO will price tomorrow at the close.

Here’s a list of the underwriters who will make $500M in fees overnight.

J.P. Morgan Securities Inc
Goldman, Sachs & Co
Banc of America Securities LLC
Citigroup Global Markets Inc
HSBC Securities (USA) Inc
Merrill Lynch, Pierce, Fenner & Smith Incorporated
UBS Securities LLC
Wachovia Capital Markets, LLC
CIBC World Markets Inc
Daiwa Securities America Inc
Mitsubishi UFJ Securities International plc
Piper Jaffray & Co
RBC Capital Markets Corporation
SunTrust Robinson Humphrey Inc
Wells Fargo Securities, LLC
ABN AMRO Incorporated
Barclays Capital Inc
Calyon Securities (USA) Inc
Credit Suisse Securities (USA) LLC
Lehman Brothers Inc
Macquarie Capital (USA) Inc
Mizuho Securities USA Inc
Morgan Keegan & Company, Inc
Santander Investment S.A . . .
TD Securities Inc
Banco Bilbao Vizcaya Argentaria, S.A
BB&T Capital Markets, a division of Scott & Stringfellow, Inc
BNP Paribas Securities Corp .
Bradesco Securities, Inc
Dundee Securities Corporation
FirstRand Bank Limited
National Bank of Kuwait
Samsung Securities Co., Ltd .
Scotia Capital (USA) Inc
Cowen and Company, LLC . .
Fox-Pitt Kelton Cochran Caronia Waller (USA) LLC
Gardner Rich & Co., Inc
Guzman & Company
Keefe, Bruyette & Woods, Inc
The Williams Capital Group, L.P
Utendahl Capital Partners, L.P

Read more about Taleb’s work:
http://www.edge.org/3rd_culture/taleb04/...

http://en.wikipedia.org/wiki/Nassim_tale...

[goinghome]

There is an unexpected market event called a Black Swan. This term in finance was discovered by Nassim Taleb, a real hedge fund strategist, who also happens to have a Ph.D. and is a graduate from the Wharton School of Business.

“Taleb's Black Swan has a central and unique attribute: the high impact. His claim is that almost all consequential events in history come from the unexpected—while humans convince themselves that these events are explainable in hindsight.” (Wikipedia)

“A black swan is an outlier, an event that lies beyond the realm of normal expectations. Most people expect all swans to be white because that's what their experience tells them; a black swan is by definition a surprise. Nevertheless, people tend to concoct explanations for them after the fact, which makes them appear more predictable, and less random, than they are. Our minds are designed to retain, for efficient storage, past information that fits into a compressed narrative. This distortion, called the hindsight bias, prevents us from adequately learning from the past.” - LEARNING TO EXPECT THE UNEXPECTED By Nassim Taleb

The Visa IPO has the potential to be such a swan. It’s an instant ~$20bil new cash infusion into the market place. This isn’t watered down Fed bailout money. This is the real deal, the largest IPO in history from the largest transaction processor on the planet.

'We have an IPO market anomaly with Visa,' said David Menlow, president of IPOfinancial.com. 'This is a singular seismic event that is not going to re-ignite the market as far as instill confidence or bring more deals into the system.' (CNN)

Visa has twice the transactions of Mastercard—TWICE. It’s the world’s largest payment network with the largest brand. The stock will be paying a 4% dividend to boot. If you’re not familiar look at the one year chart on MA. It’s one of those bottom left corner to top right corner ones.

Guess who their #1 customer is--JPMorgan Chase. Good luck being net short when this hits the street. By the way, the IPO will price tomorrow at the close.

Here’s a list of the underwriters who will make $500M in fees overnight.

J.P. Morgan Securities Inc
Goldman, Sachs & Co
Banc of America Securities LLC
Citigroup Global Markets Inc
HSBC Securities (USA) Inc
Merrill Lynch, Pierce, Fenner & Smith Incorporated
UBS Securities LLC
Wachovia Capital Markets, LLC
CIBC World Markets Inc
Daiwa Securities America Inc
Mitsubishi UFJ Securities International plc
Piper Jaffray & Co
RBC Capital Markets Corporation
SunTrust Robinson Humphrey Inc
Wells Fargo Securities, LLC
ABN AMRO Incorporated
Barclays Capital Inc
Calyon Securities (USA) Inc
Credit Suisse Securities (USA) LLC
Lehman Brothers Inc
Macquarie Capital (USA) Inc
Mizuho Securities USA Inc
Morgan Keegan & Company, Inc
Santander Investment S.A . . .
TD Securities Inc
Banco Bilbao Vizcaya Argentaria, S.A
BB&T Capital Markets, a division of Scott & Stringfellow, Inc
BNP Paribas Securities Corp .
Bradesco Securities, Inc
Dundee Securities Corporation
FirstRand Bank Limited
National Bank of Kuwait
Samsung Securities Co., Ltd .
Scotia Capital (USA) Inc
Cowen and Company, LLC . .
Fox-Pitt Kelton Cochran Caronia Waller (USA) LLC
Gardner Rich & Co., Inc
Guzman & Company
Keefe, Bruyette & Woods, Inc
The Williams Capital Group, L.P
Utendahl Capital Partners, L.P

Read more about Taleb’s work:
http://www.edge.org/3rd_culture/taleb04/...

http://en.wikipedia.org/wiki/Nassim_tale...



But knowing nobody has anymore money to spend, who's going to invest in a credit card?

[Issachar]

The "edge" link comes up "Forbidden". ???

Issachar

[BeNotAfraid]

I don't get it either. Aren't credit cards going to be the next big thing to tank as inflation continues...??

[HSmomto4]

I don't get it either. Aren't credit cards going to be the next big thing to tank as inflation continues...??

I would think so and one of those banks listed just bought out my small little bank. I'm really worried about that.

[SumSam]

Bear in mind that credit cards are still a growing thing in much of the developing world...and Visa is number one all over the place. They must be looking at growth markets out there.

Visa raises 17.9 billion dollars in historic IPO (http://afp.google.com/article/ALeqM5hcKEWK27ZkMAeMSdNNZS9NhSQh0Q)

NEW YORK (AFP) — Credit card giant Visa raised more than 17 billion dollars Tuesday in the largest share offering in US history despite a growing financial crisis in the country.

Visa sold 406,000,000 shares priced at 44 dollars each, raising nearly 17.9 billion dollars before it begins trading on the New York Stock Exchange under the ticker symbol "V" on Wednesday, the San Francisco-based company said.

"Visa expects net proceeds from the offering, after deducting underwriting discounts and commissions and estimated offering expenses, to be approximately 17.3 billion dollars," the company said in a statement.

[Cowgirl4Christ]

I totally don't understand this thread.....

[SumSam]

? :scratch Visa raised $ 17 billion from the public in an IPO. Folks who invested think Visa is a good company to bet on for the future, and Visa's growth prospects are good.

I quite didn't get the bit about swans...other than that a $ 17 billion IPO doesn't happen too often, in fact only the AT&T IPO came close.

[I'm all 67X]

Isn't VISA in actuality just a processor- a clearinghouse- not a card? The are the logo, but the card is through the issuing bank. I know Visa offers cards, but such a small amount...normally you get your VISA through some bank.

:scratch