Visa Inc. shares have shot up about 1,900% from the price of the company’s historic initial public offering, which took place 15 years ago this past weekend. The company went public in 2008 in a trepidatious banking climate — days after the collapse of investment bank Bear Stearns — and amid questions about the competitive outlook for the payments system. In a way, it was a landscape not dissimilar to today’s, which has seen high-profile bank failures and the Federal Reserve’s announcement that it would begin operating its own instant-payments service in July.
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IPO was unique because before making its public debut, the company was a not-for-profit cooperative owned by the big banks. At the time, a MarketWatch columnist mused, “the banks are looking to dump Visa at a time when things couldn’t be better,” meaning that “when investors buy shares of Visa things could get a lot worse.” He pointed to concerns about slowing growth and the threat of competition from Silicon Valley. But a purchase of Visa shares at the time of the IPO has ended up paying off big time for investors. Visa, valued at $39 billion at the time of the IPO, is now worth upwards of $450 billion and is the ninth-largest U.S. company by market value.
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