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I too am interested in this particular IPO. Mastercard certainly has done well since it's debut a couple years ago, up about five-fold, if I recall correctly. And Visa has an even greater market share. As mentioned in earlier posts, Visa isn't on the hook for defaults, since it's the banks that issue the cards that have the exposure to defaults (Amex and Discover are different in that they are also the banks that provide the credit for their cards).

I have the opportunity to particpate in the IPO through Fidelity, and have downloaded the prospectus. Still wallowing through all the verbiage, and would appreciate the perspective that other eyes might bring to the task of due diligence on this one. If anyone would like a copy, just drop me an email (submit a reply to this message but check the email option only), and I'll gladly forward you the pdf file. While I haven't read enough to come to any conclusions, it would seem this could be a great investment for the long term.

While a recession would undoubtably curb consumer spending, we're also reading that consumers are turning to their credit cards to make payments for essentials as funds become tighter. For a company like Visa that generates revenue on size and quantity of transactions, this could be good news, even though overall spending may mitigate somewhat. Bottom line, this seems like an interesting space to be in.

Not sure if others saw this tidbit in the news, but it seems to confirm some of the concern that Paul mentioned. I would think there's still more pain ahead for the economy, and for homebuilders and banks in particular: http://www.cbsnews.com/stories/2008/02/26/national/main3877652.shtml

<snip>
(AP) The number of homes facing foreclosure jumped 57 percent in January compared to a year ago, with lenders increasingly forced to take possession of homes they couldn't unload at auctions, a mortgage research firm said Monday. [...]

"You have more people going into default and a higher percentage of the properties going back to the banks," said Rick Sharga, RealtyTrac's vice president of marketing. [...]

Attempts to help struggling home owners have fallen short.

"The loan workout modification programs aren't having a significant material effect on keeping properties from going back to the banks," Sharga said.

One dramatic trend last month was a 90 percent spike in the number of properties that were repossessed by banks, compared to January 2007.

"It suggests that there's little or no equity in a lot of these homes, because they're not even being sold to investors at auctions, and it suggests a continuing weakness in a lot of markets in terms of real estate sales," Sharga said. [...]

A wave of adjustable rate mortgage resets expected in May and June threatens to push many other homeowners into default.

</snip>

Regards,
Derek
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