Visa IPO Prospectus

Some light reading for those that are interested…

 

http://www.sec.gov/Archives/edgar/data/1403161/000119312508036833/ds1a.htm

 

Still receiving great news ahead of next week’s debut.  IBD highlighted today in the news…

Great article on Block Buster vs. Netflix

Could this be a potential 3 or 4 banger? Not that I'm speculating...

Check it out here:
http://community.investopedia.com/news/IA/2008/And_The_Award_For_Best_Mo
vie_Rental_Company_Goes_To.aspx

Extra, More Visa IPO Thoughts

It’s been quiet lately on the news front so I decided to make my own.  It’s getting close and the local crowd has been maneuvering investments as needed to free up some cash to invest on either 19 or 20 March just depending which one of us gets lucky.  So the question is to invest the day it opens after the IPO or wait until the pullback, should there be a noticeable pullback.  Well here are my thoughts, as usual…  There are two things that I am focusing on and neither of them are things you can really research your way into a strong decision.  One, is who is really making out and why now.  I’m thinking the answer to number one is the banks that are going to make about 10B out of this and are in need of some cash on the books given the current credit crisis.  That is the abridged explanation as to the who and why now question.  The second question is how much can Visa really grow given the PE that they are opening (Ok, PEs don’t necessarily mean that much) with the current environment.  Now the second part is the purely speculative or this question.  You either say as times get rougher with the economy people will turn to credit to buy things and pay over time or you say people will  not use credit as much out of fear of not having the same income due to job changes/losses or loss of equity in their homes.  So who is right?  Don’t know, I guess we could do some statistics and call a number of people and get somewhat of a technical indicator but… that’s not going to happen.  I see momentum and interest driving the price higher than the IPO then a pullback and becoming a good long-term holding.  Also, is their really much room for Visa to grow.  Growth is the question.  Will Visa be a good holding, most likely, but growth is what we are after next to dividends.  If it doesn’t grow it doesn’t chase MasterCard and after all that has been the most scientific benchmark I’ve seen since the announcement…  I guess some research into market coverage for Visa and MC and take an analytical approach to determine growth potential…   Not much time left we’ll see if I decide to be analytical or speculative…

Blockbuster or Netflix

Now I don't remember if I actually discussed Netflix back in the last
6-months, but had I and you bought in it would have been around 17/share
back in September. Which is what picked it up at. At the time the big
deal was home much business they were taking from Blockbuster. Then BB
did its thing with mail-order movie rentals. Many things happened and
BB started dropping fairly quickly and it now looks as though it may be
well oversold and has reached a bottom. Current Citi analyst from
yesterday:

Citi adds Blockbuster Inc (NYSE: BBI) to the 'Top Picks Live' List.
Price target $8.

Citi analyst says, "At the current depressed valuation level, we see
limited downside to BBI. BBI has several opportunities for BBI to boost
results, including: 1) share gains from in-store competitors, 2)
improvements in Total Access terms/pricing, 3) an improving title line
up, 4) the store base revamp, and 5) the five point distribution
strategy (in-store, on-line, by mail, kiosks, and flash card media).
Furthermore, we believe the movie rental business should hold up well in
a tough economic environment as it is one of the cheapest forms of
entertainment."

Now this sounds great a possible 400% increase but from a $2 stock,
everyone can get in on that. It's not like waiting for Visa at $40 a
share and hoping it does the Master Card thing but real potential for
the rest of us without the millions to spare.

My recommendation. BB is still doing well, gave surprising results
recently, they are still everywhere to be seen, some of it's competition
is going out of business (mainly movietime) and they are very well
valued currently. Watch for the price increase supported by strong
volume then buy some and continue to buy up.

BTW NFLX is trading at 31.23 currently, almost a 100% in the past 6
months.

Visa IPO Question

I am expecting an intitial surge based purely on momentum. Then a
slight pull-back, I don't see it dropping below it's IPO price. Most
people are betting it will do well based on MasterCards IPO. The only
difference is MC opened around 19$/share which put it in a low PE in the
low teens I think. Currently MC is trading around a PE of 22-25. Visa
will open, if it opens at about $40, at a PE around 22-25. So unless
there is a lot of interest it might not grow as quickly as MC (400% in
two years). I am looking to make a quick profit, take it out and then
wait for the pullback to buy as a long term holding. VMW shot to 125
before it pulled back. Now it's back around $60. It's PE was off the
chart to start with. As IBD says PE doesn't always mean anything. I
have seen a lot of conflicting information about how much international
market share Visa has compared to MC which, in today's environment, can
make a difference. It is planning on reserving cash for its litigation.
So I don't see much risk in the investment, just need to keep taps on
the expectations.